Attempt these Finance exam questions on ratios with answers as this is an important part of the finance for non financial professionals.
Finance exam questions on ratios
Finance question 1
Financial reports published by companies and organisations can be used by those of us who are not employed by that company in trying to evaluate the financial ________ of that company.
Finance question 2
It would great if we could just walk into the company and poke our noses into all that sensitive information, but unfortunately we cant, so we have to rely on the reports published by the companies. Things like profit margins, costing products, Rand D is just too price sensitive – this is called _________ information and companies do not want that disclosed to their competitors.
Below are two companies which most of us will be familiar with – Ford Motor Company and General Motors.
Below is some information from their respective financial reports.
$ in billions
Finance question 3
Profitability is a comparison of net income to sales(Net Income ÷ Sales) which for Ford in 2014 was _____%. This means that for every one dollar made in sales they made a net profit of $____.
By operating activities we mean what the company does every day in the normal running of the business. The company buys inventory and sells it – cash flows in and flows out. Paying wages, paying utility bills and advertising are all ___________ activities.
Investing activities includes buying fixed assets such as plant and machinery, land and buildings. These are investments that will increase the productive capacity of the business. ________ activities do not happen everyday unlike operating activities. We don’t open a new factory everyday.
Look at Coca- cola’s and Walmart’s cash flow.You can see both companies generate huge amounts of cash, they are called ____ ____ because they keep producing cash like a cow keeps on producing milk.
Finance Question 8
The Statement of Cash Flows, Income Statement and Balance sheet may not tell you everything about a company, they wont tell you if industrial relations are bad and that a strike is pending – but they are a pretty good starting point if you wish to ______ a company.
Below, I have extracted some information from four technology companies their published financial reports and summarised it below – what information can we extract from this data? Please answer the questions below:
Income Statements (2014)
In terms of revenue which is the smallest company?
The main point of the income statement is that a company can increase its net assets through making income/profit. Each of these tech giants have been profitable and have increased year after year their ___ ______.
If you are assessing a supplier’s financial ___________, or a competitor’s long term __________,or if you are negotiating a pay rise for your Union members, you will use these three financial statements as part of your assessment.
These statements are presented to people outside of the company, showing whether the business has made a profit or a _________. Potential investors or creditors rely on these reports so they must be _________ and reliable.
There are strict accounting rules to say how income is calculated and rules to control the way financial information is presented to those outside of the company – this is called ________ accounting.
These financial accounting rules are important for potential investors and creditors of the company. They must be able to rely on that financial information and be able to compare the company’s performance over several years and be able to compare it with _______ companies in the same industry.
Practice finance exam 1 is an important part of this finance for dummies online course.
Finance Exam 1- attempt all questions, the answer is at the the bottom of each question
A finance definition could be ‘it is the process of finding out what an individual or organisation needs to buy, how it it is going to get the _________ to buy those things and how it is going to manage those objects once they have been purchased’.
Entrepreneurs are the creative people, the ideas people who can see an opening and a potential business idea. Often the entrepreneurs have the idea but don’t have the _________ to implement their ideas.
Investors are the guys with the money and looking to invest and make a ________ on their investment or maybe just lend it rather than invest. The investors could be individuals or __________.
Now we all know that a bookkeeper gathers the financial data and records it into ledgers – nowadays these ledgers will be in a computerised accounting package. The bookkeeper’s job is to _______ everything __________ – if it is not recorded then no-one will know about it!