#1
What does ROI stand for in finance?
Return on Investment
ExplanationMeasure of profitability relative to investment
#2
Which financial statement shows a company's revenues and expenses over a specific period?
Income Statement
ExplanationDetails company's financial performance
#3
What does the term 'Liquidity' refer to in finance?
Ability to convert assets into cash quickly
ExplanationEase of converting assets to cash
#4
What is the term for the process of spreading investments across various assets to reduce risk?
Diversification
ExplanationRisk management strategy
#5
Which financial statement provides a snapshot of a company's financial position at a specific point in time?
Balance Sheet
ExplanationDetails company's assets, liabilities, and equity
#6
What is the primary goal of financial management?
To maximize shareholder wealth
ExplanationFocuses on maximizing shareholder value
#7
What is the formula to calculate Net Profit Margin?
(Net Profit / Sales) x 100
ExplanationPercentage of profit relative to revenue
#8
What is the Time Value of Money (TVM) principle used for?
To calculate the present value of future cash flows
ExplanationAccounts for value of money over time
#9
What does EBITDA stand for in finance?
Earnings Before Interest, Taxes, Depreciation, and Amortization
ExplanationEarnings metric before certain expenses
#10
What is the primary purpose of financial forecasting?
To predict future financial performance
ExplanationAnticipates financial outcomes
#11
What is the purpose of a SWOT analysis in business?
To assess a company's internal strengths and weaknesses
ExplanationEvaluation of internal factors
#12
What is the purpose of financial leverage?
To magnify returns to shareholders
ExplanationBoosts returns through debt
#13
Which financial ratio measures a company's efficiency in using its assets to generate revenue?
Asset Turnover Ratio
ExplanationEfficiency in asset utilization
#14
Which financial ratio measures a company's ability to cover short-term liabilities with its short-term assets?
Current Ratio
ExplanationIndicator of short-term liquidity
#15
Which of the following is a characteristic of a perfectly competitive market?
Many buyers and many sellers
ExplanationHigh competition with numerous participants
#16
Which of the following is NOT a component of the DuPont analysis?
Operating Expenses
ExplanationNot a part of DuPont's method
#17
What does the term 'Economic Moat' refer to in investing?
A company's competitive advantage
ExplanationStrengthens a company's market position
#18
Which of the following is NOT a component of the Current Ratio?
Total Assets
ExplanationNot included in current ratio calculation