Wall Street Prep Accounting-Exam with complete solutions Graded A+
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Course
Wall Street
Institution
Wall Street
Wall Street Prep Accounting-Exam with complete solutions
Liquidity Ratios
measures of a firm's short-term ability to meet its current obligations
Profitability Ratios
measures of a firm's profitability relative to its assets (operating efficiency) and to its revenue (operating profitability...
cash from operations (CFO)
uses net income as a starting point and converts accrual base net income into cash flow from
operations via a series of adjustments
cash from investing activities (CFI)
capital expenditures / asset sales and purchases
, cash from financing activities (CFF)
new borrowing / pay down of debt / new issuance of stock / share repurchases / issuance of
dividends
working capital
-CFO
-increase in current assets = cash outflow
-increase in current liabilities = cash inflow
asset write downs / impairments
-added back to CFS via CFO
Increases in A/R, inventory, prepaid expenses, other current assets should be _____________ net
income to get to CFO
subtracted
increases in A/P, accrued expenses, other current liabilities should be ____________ net income to
get to CFO
added
gains on sale of assets
subtracted from CFO
stock based compensation
added to CFO
Common CFI inflows/outflows
- capital expenditures
- purchases of intangible assets
+ asset sales
+ sales of debt/ equity security
- purchases of debt/equity security
Common CFS inflows/outflows
-Issuance / repayment of debt (cash inflow / outflow)
-Common stock issued / repurchased (cash inflow / outflow)
-Payment of common & preferred dividends (cash outflow)
Assumptions of Accounting
accounting entity, going concern, measurement, periodicity
principles of accounting
1. Historical Cost
2. Revenue Recognition
3. Matching Principle
4. Full Disclosure
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