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

• Net Income

• Cash Flow from Operating Activities

• Net Plant and Equipment

• Balance of Retained Earnings on Dec 31

• EBIT

• Gross Profit

• Cost of Goods Sold

• Inventory

• Common Stock

• Cash Flow from Investing Activities

Net Working Capital is:

• Current Assets minus Equity

• Total Assets minus Total Liabilites

• Total Liabilities minus Equity

• Current Assets minus Current Liabilites

____ 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

• Cash

• Accounts Payable

• Accounts Receivable

• Inventory

• Notes Payable

• Equipment

• Office Building

• Land

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

• Net Income / Sales

• Current Ratio

• Total Assets / Total Equity

• Equity Multiplier

• Total Debt / Total Equity

• Debt to Equity Ratio

• Current Assets / Current Liabilities

• Profit Margin

• Cost of Goods Sold /

  Inventory

• Inventory Turnover Ratio