#1
Which financial statement provides an overview of a company's financial position at a specific point in time?
Balance Sheet
ExplanationSnapshot of assets, liabilities, and equity.
#2
What does the term 'EBIT' stand for in financial statements?
Earnings Before Interest and Taxes
ExplanationOperating profit before interest and taxes.
#3
What is the primary purpose of the 'Income Statement' in financial reporting?
To display the company's profitability over a specific period
ExplanationSummarizes revenue, expenses, profit for period.
#4
What does the term 'EPS' stand for in financial statements?
Earnings Per Share
ExplanationProfitability measure: earnings per outstanding share.
#5
Which financial statement reflects a company's revenues, expenses, and profits over a specific period?
Income Statement
ExplanationReports financial performance over time period.
#6
What does the term 'EBITDA' stand for in financial statements?
Earnings Before Interest, Taxes, Depreciation, and Amortization
ExplanationOperating performance before non-operating expenses.
#7
In financial accounting, what does the term 'accrual' refer to?
Expenses incurred but not yet paid
ExplanationRecording expenses when incurred, not when paid.
#8
Which financial statement represents the flow of cash into and out of a business during a specific period?
Cash Flow Statement
ExplanationTracks cash movements: operations, investments, financing.
#9
In financial accounting, what is the purpose of the 'Statement of Cash Flows'?
To show how cash has been generated and used during a period
ExplanationDetails cash inflows and outflows.
#10
What does the term 'working capital' represent in financial management?
Current assets minus current liabilities
ExplanationLiquidity measure: ability to meet short-term obligations.
#11
What is the purpose of the 'Statement of Retained Earnings' in financial statements?
To show changes in equity over a period
ExplanationTracks retained earnings changes.
#12
What is the formula for calculating Return on Assets (ROA) in financial analysis?
Net Income / Average Total Assets
ExplanationProfitability ratio: earnings relative to assets.
#13
What does the Debt-to-Equity ratio measure in financial analysis?
The proportion of debt used to finance the company's assets
ExplanationIndicates reliance on debt financing.
#14
In financial statements, what does the term 'amortization' refer to?
The process of allocating the cost of intangible assets over time
ExplanationSpreading cost of intangible assets over useful life.
#15
What is the DuPont Analysis used for in financial performance evaluation?
Analyzing a company's profitability
ExplanationDecomposes ROE into key drivers: margin, turnover, leverage.
#16
In financial accounting, what does the term 'goodwill' represent?
An intangible asset representing the excess of the purchase price over fair market value
ExplanationValue of intangible assets over market value.
#17
What does the term 'EBITA' stand for in financial analysis?
Earnings Before Interest, Taxes, and Amortization
ExplanationOperating performance before non-operating expenses.