2024 MN State FBM Exam

Which of the following is the correct formula for calculating Net Worth?

• Assets – Liabilities = Net Worth

• Liabilities – Assets = Net Worth

• Revenue – Expenses = Net Worth

• Expenses - Revenue = Net Worth

Which of the following is an example of an intermediate asset?

• Dairy cow

• Grain in the bin

• Farmland

• Operating loan

Which of the following is an example of a long term asset?

• Dairy cow

• Grain in the bin

• Farmland

• Operating loan

Which of the following is an example of an intermediate liability?

• Dairy cow

• Grain in the bin

• Farmland

• Operating loan

• Tractor Loan

Which of the following is an example of a current liability?

• Dairy cow

• Grain in the bin

• Farmland

• Operating loan

• Tractor Loan

Which of the following is an example of a current asset?

• Dairy cow

• Grain in the bin

• Farmland

• Operating loan

• Tractor loan

Which of the following is a category of financial ratios and metrics that can be calculated using the balance sheet?

• Financial Efficiency Ratios

• Profitability Ratios

• Repayment Capacity Ratios

• Solvency ratios

Liquidity ratios evaluate the position of what balance sheet category?

• Current position

• Intermediate position

• Long Term position

• Net Worth position

Current assets minus current liabilities equals _________?

• Working capital

• Current ratio

• Debt to asset ratio

• Net farm income

• Equity

If ABC Farms sells $20,000 of grain and uses the proceeds to pay off $20,000 of operating debt (the operating loan), which of the following is true?

• The farm’s working capital stays the same.

• The farm’s working capital improves (increases).

• The farm’s working capital deteriorates (decreases).

• The farm’s net worth deteriorates (decreases).