dupont analysis questions and answers




Try these dupont analysis questions and answers as they are a key part of the on line finance course for non finance professionals.




Dupont analysis questions and answers

Question 1
The DuPont framework has three parts:

1. ______________
2. ______________
3. ______________


Question 2
Leverage gives an indication of how much money the company has _________ to purchase fixed assets such as land, buildings and plant and machinery.

Question 3
The leverage tells us what percentage of the assets where acquired with borrowed money. The assets purchased are then used to generate ________, but we want to know how efficient the assets are being used to generate sales.

dupont analysis questions and answers
Dupont analysis questions and answers

Question 4
The __________ component of the DuPont framework looks at the relationship between the amount of sales to the value of assets.
The more sales generated per dollar of asset the _______.





Question 5
Profitability is the relationship between income and _____.

This on-line course entitled finance for dummies consists of the following lessons:

  1. Finance for dummies
  2. Finance definition
  3. Finance entrepreneurship
  4. What is Accounting
  5. Financial statements
  6. Balance Sheets
  7. Income statements
  8. Statement of Cash Flows
  9. Financial Ratio Analysis
  10. Return on equity
  11. DuPont framework
  12. Dupont analysis case study
  13. Comparison financial statements
  14. operating cycle
  15. cash management
  16. receivables and inventory
  17. how to price a product
  18. calculate break even point
  19. preparing a budget
  20. budgeting steps
  21. understanding income tax
  22. tax brackets
  23. Next move practice finance exam questions
    1. Finance exam questions on ratios
    2. Finance questions
    3. Mock finance exam
    4. Practice finance tests
    5. Finance exam questions and answers
    6. Finance Exam 1
    7. Return on Equity Quizlet
    8. Dupont analysis questions and answers

Finance questions




Try these finance questions with answers as they are an important part of the finance course for non finance professionals.




Please attempt all finance questions, answers are at the end of each question.

Question 1
The Statement of ____ Flows is the third primary financial statement, the Income Statement and the Balance Sheet are the other two.


Question 2
To make the cash flow statement more useful it separates cash flows into three categories:

1. ________ ____________
2. ________ ____________
3. ________ ____________


Question 3
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.

Question 4
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.

Question 5
__________ activities involves how much money the company has borrowed or repaid, has it paid any dividends to shareholders and has it issued any shares to raise capital for new projects.

In the table below are the cash flows of three major companies:

  1. Exxon Mobile
  2. Wal-Mart
  3. Coca-Cola
CASH FLOW
In  Billions Operating Investing Financing
Exxon Mobile 45.1 -27.0 -17.9
Wal-mart 23.3 -12.3 -11.0
Coca-Cola 10.6 -7.5 -3.6

Question 6
How much is Exxon’s spending on investing activities?


Question 7
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.



This on-line course entitled finance for dummies consists of the following lessons:

  1. Finance for dummies
  2. Finance definition
  3. Finance entrepreneurship
  4. What is Accounting
  5. Financial statements
  6. Balance Sheets
  7. Income statements
  8. Statement of Cash Flows
  9. Financial Ratio Analysis
  10. Return on equity
  11. DuPont framework
  12. Dupont analysis case study
  13. Comparison financial statements
  14. operating cycle
  15. cash management
  16. receivables and inventory
  17. how to price a product
  18. calculate break even point
  19. preparing a budget
  20. budgeting steps
  21. understanding income tax
  22. tax brackets
  23. Next move practice finance exam questions
    1. Finance exam questions on ratios
    2. Finance questions
    3. Mock finance exam
    4. Practice finance tests
    5. Finance exam questions and answers
    6. Finance Exam 1
    7. Return on Equity Quizlet
    8. Dupont analysis questions and answers

mock finance exam




This mock finance exam with answers is an important part of this finance for dummies course




Please attempt all questions in this mock finance exam – answers at the bottom of each question.

Question 1
The ________ Statement is the second of the three primary financial statements; the balance sheet and cash flow statement are the other two.


Question 2
Apple Inc. for example earns its revenue by selling smart phones and ipads. Microsoft earns its revenues by selling __________.

Question 3
________ are the overheads in running the company for example wages to employess, buying inventory, energy bills and advertising.

Mock finance exam
Mock finance exam

Question 4
If Revenues are greater than expenses the company has made an income in the form of ________. If expenses exceed revenues then the company will make a _______.


Question 5

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 Billions Revenues Expenses Net Income
Facebook 12.5 9.6 2.9
Google 66.0 41.6 14.4
Microsoft 86.8 64.7 22.1
Apple 182.8 143.3 39.5

Question 6
In terms of revenue which is the smallest company?


Question 7
In terms of revenue which is the largest company?

Question 8
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 ___ ______.

Question 9

This on-line course entitled finance for dummies consists of the following lessons:

  1. Finance for dummies
  2. Finance definition
  3. Finance entrepreneurship
  4. What is Accounting
  5. Financial statements
  6. Balance Sheets
  7. Income statements
  8. Statement of Cash Flows
  9. Financial Ratio Analysis
  10. Return on equity
  11. DuPont framework
  12. Dupont analysis case study
  13. Comparison financial statements
  14. operating cycle
  15. cash management
  16. receivables and inventory
  17. how to price a product
  18. calculate break even point
  19. preparing a budget
  20. budgeting steps
  21. understanding income tax
  22. tax brackets
  23. Next move practice finance exam questions
    1. Finance exam questions on ratios
    2. Finance questions
    3. Mock finance exam
    4. Practice finance tests
    5. Finance exam questions and answers
    6. Finance Exam 1
    7. Return on Equity Quizlet
    8. Dupont analysis questions and answers

Practice finance tests




Try these Practice finance tests as part of the on line course finance for dummies.

Practice finance tests answer all questions and the answer appears below each question.

Question 1
Financial information presented to the public must be relevant, accurate and __________.





Question 2
Financial statements are the documents presents to the public and there are three major financial statements:

1._________________
2._________________
3._________________


Question 3
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.

Question 4
The first and probably the most important statement of all is the balance sheet.The balance sheet is a list of all _______ and ___________ at a particular moment in time.

Below is an extract  from Apple’s balance sheet.

 

APPLE Inc.         Balance Sheet as at  September 2014in millions $
Current Assets
cash and cash equivalents 13844
short term marketable securities 11233
accounts receivable 17460
inventories 2111
deferred tax assets 4318
vendor non-trade receivables 9759
other current assets 9806
Total current assets 68531
Long term marketable securities 130162
property plant and equipment 20624
Goodwill 4616
Acquiring intangible assets net 4142
other assets 3764
Total Assets 231839

Question 5
How much cash has Apple got at September 2014?

Practice finance tests
Practice finance tests

Question 6
But what is Apple’s biggest asset?


Question 7
How much is apple owed by its customers?




Question 8
How much was Apples inventory (all those iphones and i watches)?

Question 9
How much was Apple’s total assets at the end of September 2014.

Question 10
Total Assets = Liabilities + Owner’s Equity
The above equation is called the ____________ ____________ and it underpins the balance sheet.

This on-line course entitled finance for dummies consists of the following lessons:

  1. Finance for dummies
  2. Finance definition
  3. Finance entrepreneurship
  4. What is Accounting
  5. Financial statements
  6. Balance Sheets
  7. Income statements
  8. Statement of Cash Flows
  9. Financial Ratio Analysis
  10. Return on equity
  11. DuPont framework
  12. Dupont analysis case study
  13. Comparison financial statements
  14. operating cycle
  15. cash management
  16. receivables and inventory
  17. how to price a product
  18. calculate break even point
  19. preparing a budget
  20. budgeting steps
  21. understanding income tax
  22. tax brackets
  23. Next move practice finance exam questions
    1. Finance exam questions on ratios
    2. Finance questions
    3. Mock finance exam
    4. Practice finance tests
    5. Finance exam questions and answers
    6. Finance Exam 1
    7. Return on Equity Quizlet
    8. Dupont analysis questions and answers

WHY LEARN BOOK-KEEPING?

Why learn book-keeping – it is a question I often get asked by my students. It is a good question and it deserves a considered reply.


But before answering the question why learn book=keeping it is important to explain ‘what is bookkeeping’. Bookkeeping is the recording of a business’s commercial transactions. Examples of such transactions are purchases, sales and expenses which must be recorded in the business’s accounting records. Once the transactions have been recorded, they can be summarised at the end of the accounting period to produce the Income Statement and Balance Sheet.

From this definition we can see that bookkeeping is at the heart of business it is often said to be the language of business. If you want to talk business then you have to know the meaning of net profit, gross profit, receivables and payables.

If you want to really understand the financial performance and financial position of the business then a knowledge of double entry bookkeeping is very useful.

The reason why people learn bookkeeping are many and varied. Maybe you want to pursue a career as a bookkeeper or an accountant and obviously you will have to study double entry bookkeeping to a level that many would not wish to do so.

You may run your own business and feel that a knowledge of bookkeeping would give you a greater understanding of the business, and perhaps you are becoming more than a little concerned about the rising costs of your accountant’s fee. Even if you can’t do without an accountant perhaps you could reduce his fees by doing some of the bookkeeping work yourself.

Also book-keeping does lend itself to computerisation, essentially you are inputting data of financial transactions into the accounting software, and the computer then  analyses it  and presents  it in useful forms such as the Income Statement and the Balance Sheet. Providing the data is entered correctly then computer software is fine, the problem is when things go wrong. For example if capital expenditure is inputted  as revenue expenditure. A good working knowledge of bookkeeping would help you to correct and reverse this error – so that you can get  the best out of your computer package.

Lastly many courses at college or universities run courses on finance and often bookkeeping is a module for which they have to study. Many finance students will go on to be shareholders in companies, or become government or bank officials and their knowledge of double entry will always come in useful.

 

why learn book-keeping
Knowledge of book-keeping will make you a better student.

About the author  of this article.
Michael Hughes is the founder and creator of this site on Free Book-keeping IMG_0177Courses Online UK. He is  known for his ability to explain book-keeping and accounting in a clear, concise and thorough manner. He has a BA (Hons) in Accounting and Finance and a Teaching Certificate from the University of Manchester.His background includes:-15 years as founder and managing partner of a UK accountancy distance learning company.-11 years as a college lecturer in accountancy.-5 years in HMRC-4 years in public accountancy practice.
His interest and passion includes communicating accounting and creating free book-keeping courses and imparting his knowledge through the Internet.


 

Michael lives in Lincolnshire in the UK and he can be contacted by email on frankwood1@o2.co.uk
For a list of all the free bookkeeping courses that we offer please click the link below:
List of free book-keeping courses

Learn double entry bookkeeping in one hour

Learn double entry bookkeeping in one hour – yes it is possible once you understand the main concept underpinning double entry.


That concept is called the business entity concept which states that for bookkeeping purposes the business must be treated separately from the owner.

Even if you are self employed and you trade in your own name, for bookkeeping purposes the business is separate from you i.e. it has a life (and death) of its own.

This separation between the owner and the business  means that there are two aspects to be considered in every transaction. One from the business’ point of view and the other from the proprietor’s point of view – hence the ‘double’ entry.

This dual effect is best illustrated with an example

Suppose on May 1 Tom decides to start his own business as a plumber.

He invests £1000 into the business bank account.

What are the two effects of this?
1. The business gains cash at bank of £1000
2. The business owes the proprietor (Tom) £1000

The correct terminology for money owed by a business to the proprietor is called ‘CAPITAL’.

The double entry for recording the above means that we have to open two accounts :

1.Bank Account

2.Capital Account

The entries in the accounts would look like this:

Bank Account
Dr         Cr
Date Details £ Date Details £
1 May Capital A/c 1000
Capital Account
Dr           Cr
Date Details £   Date Details £
 1  Bank a/c 1000

Notice that that the entry in the bank is made on the left hand side of the account and the entry in the capital account is made on the right hand side.

The rule is:

if we are going to increase the value of an asset such as paying money into the business bank account then we record this on the left hand side of the account.

if we are going to increase the value of a liability such as capital we show it on the right hand side.

Now its your turn, complete the double entry for the following transaction.

Becky started in businss on April 1 as a hairdresser and deposited £3500 into her business bank account

Bank  Account
Dr Cr
Date Details £ Date Details £
Capital Account
Dr Cr
Date Details £ Date Details £

ANSWER

Bank Account
Dr         Cr
Date Details £ Date Details £
1 Capital A/c 3500

Capital Account
Dr           Cr
Date Details £   Date Details £
 1  Bank a/c 3500

It’s probably taken you under an hour to read this article but by now you should have grasped the main principle of double entry bookkeeping. If you would like to continue this article on learn double entry bookkeeping then please click on the links below.

About the author  of this article.
Michael Hughes is the founder and creator of this site on Free Book-keeping IMG_0177Courses Online UK. He is  known for his ability to explain book-keeping and accounting in a clear, concise and thorough manner. He has a BA (Hons) in Accounting and Finance and a Teaching Certificate from the University of Manchester.His background includes:-15 years as founder and managing partner of a UK accountancy distance learning company.-11 years as a college lecturer in accountancy.-5 years in HMRC-4 years in public accountancy practice.
His interest and passion includes communicating accounting and creating free book-keeping courses and imparting his knowledge through the Internet.

Michael lives in Lincolnshire in the UK and he can be contacted by email on frankwood1@o2.co.uk
For a list of all the free bookkeeping courses that we offer please click the link below:
List of free book-keeping courses