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WGU C214 FINANANCIAL MANAGEMENT ACTUAL EXAM STUDY GUIDE |LATEST UPDATE |BRAND NEW VERIFIED EXAM QUESTIONS AND CORRECT ANSWERS ALL GRADED A+|GUARANTEED SUCCESS

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WGU C214 FINANANCIAL MANAGEMENT

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WGU C214 FINANANCIAL MANAGEMENT

WGU C214 FINANANCIAL MANAGEMENT ACTUAL EXAM STUDY GUIDE |LATEST UPDATE |BRAND NEW VERIFIED EXAM QUESTIONS AND CORRECT ANSWERS ALL GRADED A+|GUARANTEED SUCCESS Corporate Finance - ANSWER-focuses on financial decision making by a firms management Investments - ANSWER-various types of finan...

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Uploaded on October 9, 2024
Number of pages 43
Written in 2024/2025
Type Exam (elaborations)
Contains Questions & answers

Institution WGU C214 FINANANCIAL MANAGEMENT
Course WGU C214 FINANANCIAL MANAGEMENT

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WGU C214 FINANANCIAL
MANAGEMENT ACTUAL EXAM
STUDY GUIDE |LATEST UPDATE
2024-2025|BRAND NEW VERIFIED
EXAM QUESTIONS AND CORRECT
ANSWERS ALL GRADED
A+|GUARANTEED SUCCESS

Corporate Finance - ANSWER-✅focuses on financial decision making by a firms
management

Investments - ANSWER-✅various types of financial instruments (stocks, bonds, etc)

Banking or Financial Institutions - ANSWER-✅make money by paying depositors a
smaller interest rate than the interest rate charged to borrowers

Treasury Securities - ANSWER-✅generally bonds that are issued by the US
government

Corporate Bonds - ANSWER-✅firms borrowing from the public

Stocks - ANSWER-✅a share of ownership in a company

Primary financial markets - ANSWER-✅markets where securities are first issued

Syndicate - ANSWER-✅a group that is temporarily formed to handle a bond or stock
issue: generally large investment bank or institutional investors

Underwriter - ANSWER-✅responsible for determining the value of the security; may
purchase all the securities & then resale to investors

Competitive sale - ANSWER-✅underwriters submit bids offering highest
price/lowest interest rate; underwriter resales a slightly higher price

Negotiated sale - ANSWER-✅underwriters submit bids, go thru interview to be
selected

, Secondary financial markets - ANSWER-✅where securities are traded after the
initial offering (stock market)

Auction market - ANSWER-✅has a physical location & prices are determined by the
highest price an investor is willing to pay (New York Stock Exchange)

Dealer market - ANSWER-✅no physical location- securities are bought & sold thru a
network of dealers that trade for themselves; multi dealers per stock (NASDAQ)

Role of financial markets - ANSWER-✅they reduce the cost of borrowing from the
public or selling ownership to the public

Role of Specialist (NYSE) or Dealers - ANSWER-✅provide liquidity for a fair & orderly
market; may increase the spread to do so (charge a lower price to seller and a higher
price to buyer)

Financial market liquidity - ANSWER-✅the ease of trading in the market (high
frquency traders)

Market orders - ANSWER-✅time sensitive; sales at current bid price/buys at current
asking price when order is placed-immediately

Limited orders - ANSWER-✅price sensitive; sell occurs when price of stock matches
order price

Role of price - ANSWER-✅convet information to consumers; affect incentives
&affect the distribution of income

Dollar Returns - ANSWER-✅Pt - Pt-1 + CFt (Pt= sold price, Pt-1=bought price,
CFt=cash flow-coupons for bonds/dividians for stocks)

Percentage Returns - ANSWER-✅Pt - Pt-1/Pt-1 + CFt/Pt-1 x 100 (1.2)
(figure for dollar return and divide into bought price)

Goal of company/firm - ANSWER-✅to maximize shareholder value or maximize
profit

Agency costs - ANSWER-✅costs that are incurred when management doesn't act in
the best interests of shareholders

Profit maximizarion - ANSWER-✅the potential effect of focusing soley on profits

Accounting - ANSWER-✅is backward-looking and risk free

Finance - ANSWER-✅is forward-looking and involes massive uncertainty

,Income Statement - ANSWER-✅show results of operation over time; revenues -
expenses = net income

Balance Sheet - ANSWER-✅a "snap shot" of a firm's assests & financing at a
paticular point in time; Assets= Liabilities + Owner's Equity

Statement of Cash Flows - ANSWER-✅tracks all cash in and out of the firm

Cash Accounting - ANSWER-✅cash in =revenue; cash out=expense

Accrual Accounting - ANSWER-✅revenues are recognized when the earnings
process is complete; expenses are "matched" to recongized revenues

Cash-based income - ANSWER-✅an informal metric based on cash in & cash out of
the firm

Income for tax purposes - ANSWER-✅based on the government's definition of
income, this is the amount of income the government will tax

Accounting income - ANSWER-✅the income calculated using accrual accounting
(aka, GAAP); best & most complicated metric for understanding the operations of
the firm

On the Income statement - ANSWER-✅Revenues- Cost of goods sold= Gross profit
- Operating expenses= earning before interest & taxes
- interest expenses, - taxes= Net income

Revenue - ANSWER-✅recognized when "earned"

Cost of Goods Sold - ANSWER-✅direct costs of materials & labor

Gross profit - ANSWER-✅revenue - cost of goods sold

Operating Expenses - ANSWER-✅expenses not directly associated with production
(office expenses, administrative expenses, depreciation, research & development)

EBIT - ANSWER-✅Earnings before interest & tax; Gross profit - operating expenses
(also known as operating income)

Net Income on balance sheet - ANSWER-✅EBIT - interest - taxes

Current Assets - ANSWER-✅cash marketable securities, A/R, inventory

Fixed Assests - ANSWER-✅gross fixed assets- accumulated depreciation

Current Liabilities - ANSWER-✅A/P, accruals, notes payable

, Equity - ANSWER-✅Commonstock, paid-in capital, retained earnings

Accumulated depreciation - ANSWER-✅total of all depreciation claimed against the
firms fixed assets

Net PP&E - ANSWER-✅original cost (Gross PP&E) - accumulated depreciation

Net Income (linking balance sheet & income statement) - ANSWER-✅income
statement)
dividends + change in retained earnings

New Retained earnings - ANSWER-✅0d retained earnings + change in retained
earnings or
old retained earnings + net income - dividends

Gross PP&E - ANSWER-✅orginal cost of property, plant & equipment

Statement of Cash Flows - ANSWER-✅cash flow reveals the true health of a
company; explains cash in & cash out from operations, investing & financing
CFO + CFI + CFF = change in cash - beginning cash = end cash

Operational - ANSWER-✅decisions on what/how/whom to sell & buy from

Investing - ANSWER-✅decisions on purchasing & selling of long term assets

Financing - ANSWER-✅decision on debt & equity, repayment of debts, repurchasing
stock & payment of dividends

Core activities - ANSWER-✅firm's core activities will impact the way cash flows are
catagorized

Cash flow management - ANSWER-✅some managers will "manage"
(increase/decrease) reporting of cash flows

Market pressure - ANSWER-✅pressures to manipulate cash flow categorization in
the market place

Differences in CFO & Net Income - ANSWER-✅1. revenue is not the same as cash
2. gains/losses are only seen in net income
3. depreciation is only seen in net income

Calculating CFO from balance sheet - ANSWER-✅Net income + non-cash expenses
(depreciation) + decrease in operating asset accounts (other than cash) - increase in
operating asset accounts (other than cash) + increase in operating liability accounts
(other than notes payable) - decrease in operating liability accounts (other than
notes payable

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Exam (elaborations)

WGU C214 FINANANCIAL MANAGEMENT ACTUAL EXAM STUDY GUIDE |LATEST UPDATE |BRAND NEW VERIFIED EXAM QUESTIONS AND CORRECT ANSWERS ALL GRADED A+|GUARANTEED SUCCESS

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