Exam 3 Review Questions

Where would you find the following items on these three financial statements?

Groups:

(a) Balance Sheet

,

(b) Income Statement

,

(c) Statement of Cash Flows

• Balance of Retained Earnings on Dec 31

• Cash Flow from Operating Activities

• Net Income

• Inventory

• Cash Flow from Investing Activities

• Cost of Goods Sold

• Gross Profit

• Net Plant and Equipment

• EBIT

• Common Stock

Net Working Capital is:

• Current Assets minus Equity

• Total Assets minus Total Liabilites

• Total Liabilities minus Equity

• Current Assets minus Current Liabilites

(a)   is the most current/liquid of all the assets.

What is a sunk cost?

Organize these options into the right categories

Groups:

(a) Current Assets

,

(b) Current Liabilities

,

(c) Property, Plant, & Equipment

• Land

• Notes Payable

• Accounts Payable

• Inventory

• Equipment

• Office Building

• Accounts Receivable

• Cash

The cash flow of a business that is available for

distribution to the firm's creditors and stockholders is called what?

• Net Working Capital

• Free Cash Flow

• Net Income

• EBITDA

What is an opportunity cost?

Match the following ratios with their respective formulas

• Total Assets / Total Equity

• Debt to Equity Ratio

• Cost of Goods Sold /

  Inventory

• Inventory Turnover Ratio

• Total Debt / Total Equity

• Current Ratio

• Current Assets / Current Liabilities

• Equity Multiplier

• Net Income / Sales

• Profit Margin