WGU C214 Finance Management PVCC Q1. How can a private firm appropriately maximize shareholder value?By making decisions that keep the control of the business with the owners Q2. Why are American regulators focused on international investing in a global marketplace?Because international investing in a global marketplace is the concern of American investors Q3. What is one of the two basic types of financial instruments?Bonds Q4. If a company outsources the manufacturing of its products to a foreign country, what are the likeliest outcomes?Domestic employment will decrease Consumer prices will decrease Q5. What is true about the content and structure of a balance sheet?It reports the assets, liabilities, and equity at a point in time Q6. A company reported an increase in accounts receivable of $5,000 during the recent period. Half of this amount is expected to be collected next period.How will this change in accounts receivable affect the cash flows from the operating activities section?The change will decrease cash flows from operations by $5,000 Q7. Which statement accurately explains the recognition of revenues and expenses under accounting income and income for tax purposes?Revenues and expenses are always recognized in the same period for accounting income purposes and income for tax purposes Q8. What is the basic equation for a balance sheet?Assets = liabilities + equity Q8A.Selected Data for 20x2 for ABD Inc. 1 / 2
Net income$ 1,000 Depreciation expense$300 Change in operating assets $600 Change in net property, plant, and equipment
$ 5,000
Changes in long-term liabilities $ 1,000 Dividends paid$200 What is the firm’s cash flow from investments, using the data above and assuming no asset disposals?$5,000 outflow Q9. What do cash flows from investing activities generally relate to?A firm's purchase and sale of long-term assets Q10. Which transaction is reflected in cash flow from operating activities?Cash sales to customers Q11. What does free cash flow represent?Cash available for distribution after funding required reinvestment 12.An analyst is comparing the ratios of two different firms and needs to address timing differences.What would be considered an example of a timing difference between the two firms?The firms have different fiscal years
13.A company’s yearend balance sheet for 2013:
AR: 900
Inventory: 1200
Fixed assets: 1000
AP: 1300
Sales: 4000
Salaries: 275
14.What is their fixed asset turnover ratio?
4.0 15.A firm has a ROE of 0.27 and the industry average ROE is 0.24 Which conclusion would an analyst draw when comparing the firm to the industry?The firm is generating higher returns to owners than the industry
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