#1
Which financial statement provides information about a company's profitability over a specific period?
Income Statement
ExplanationIt summarizes revenues, expenses, and profits or losses during a specific time frame.
#2
In corporate stock structure, what term is used to represent ownership units?
Shares
ExplanationShares represent ownership interests in a company.
#3
In financial statement analysis, what does the term 'EBITDA' stand for?
Earnings Before Interest, Taxes, Depreciation, and Amortization
ExplanationEBITDA represents a company's earnings before certain expenses.
#4
Which financial statement provides a summary of a company's cash inflows and outflows over a specific period?
Cash Flow Statement
ExplanationIt shows how cash is generated and used during a specific time frame.
#5
What is the primary purpose of the Statement of Cash Flows in financial reporting?
To show how cash is generated and used during a period
ExplanationIt provides insights into a company's cash inflows and outflows.
#6
What does the debt-to-equity ratio measure in financial statement analysis?
Financial Leverage
ExplanationIt gauges the proportion of a company's financing that comes from debt compared to equity.
#7
Which of the following is an example of a liquidity ratio?
Current Ratio
ExplanationIt assesses a company's ability to cover its short-term liabilities with its short-term assets.
#8
In stock structure, what term refers to the total value of all outstanding shares of a company?
Market Capitalization
ExplanationIt represents the total market value of a company's outstanding shares.
#9
Which financial ratio measures a company's ability to meet its short-term obligations with its most liquid assets?
Quick Ratio
ExplanationIt assesses the company's ability to cover short-term liabilities with highly liquid assets.
#10
What does the term 'dividend yield' indicate in the context of stock analysis?
Cash dividend distribution as a percentage of the stock price
ExplanationIt represents the dividend income as a percentage of the stock's current market price.
#11
Which financial statement reflects a company's financial position at a specific point in time?
Balance Sheet
ExplanationIt shows a company's assets, liabilities, and equity at a specific moment.
#12
What is the formula for calculating the Earnings Per Share (EPS) in financial statement analysis?
Net Income / Average Shareholders' Equity
ExplanationEPS measures the company's profitability per outstanding share of common stock.
#13
What does the Price/Earnings (P/E) ratio indicate about a company's stock?
Earnings growth potential
ExplanationIt reflects the market's expectations for a company's future earnings growth.
#14
What is the DuPont analysis used for in financial statement analysis?
Assessing profitability
ExplanationIt breaks down return on equity into components to assess a company's profitability.
#15
In stock structure, what is the difference between common stock and preferred stock?
Dividend priority
ExplanationPreferred stockholders have priority in receiving dividends over common stockholders.