Exam 8: Assessing a New Ventures Financial Strength and Viability

The statement of cash flows summarizes the changes in a firm's cash position for a specified period of time and details why the change occurred.

On a firm's income statement, net sales consists of ________.

The four main financial objectives of a firm are ________.

Southwest Airlines uses its assets very productively. Its turnaround time, or the time that its airplanes sit on the ground while they are being loaded and unloaded, is the lowest in the airline industry. In terms of the primary financial objectives of a firm, this attribute is a measure of Southwest's ________.

Money owed to a company by its customers is referred to as ________.

________ depict relationships between items on a firm's financial statements.

A firm's profit margin, or return on sales, is computed by dividing net income by net sales.

Which of the financial statements used by businesses to keep track of their financial affairs is the most similar to an ordinary person's end-of-the month bank statement?

Pro forma financial statements are projections for future periods based on forecasts and are typically completed for 2 to 3 years into the future.

Cash plus items that are readily convertible to cash, such as accounts receivable, marketable securities, and inventories are classified as ________ assets on a firm's balance sheet.

The pro forma income statement shows the projected flow of cash into and out of the company during a specified period.

In the context of a firm's statement of cash flows, operating activities include the purchase, sale, or investment in fixed assets (e.g., real estate, equipment, and buildings).

Which of the following is an example of a long-term liability?

In the context of a firm's statement of cash flows, ________ activities include cash raised during the period by borrowing money or selling stock and/or cash used during the period by paying dividends, buying back outstanding stock, or buying back outstanding bonds.

Susan Howard owns a seafood restaurant in Naples, Florida. She is currently owed $21,000 by a corporation that she catered a series of meetings for and $3,000 on an overdue account. Amanda has $24,000 in ________.