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Peregrine -Foundations of Business Finance and Verified Answers| 100% Correct| Grade A+
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Peregrine -Foundations of Business Finance and Verified Answers| 100% Correct| Grade A+
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Peregrine -Foundations of Business Finance and VerifiedAnswers| 100% Correct| Grade A+
__________-__________-__________ __________ __________ __________ __________ equals the
number of shares outstanding multiplied by the original selling price of the shares, net of the par value. -
✔✔Paid-in-capital in excess of par
__________ __________ equals the number of outstanding common shares multiplied by the par value
per share. - ✔✔Common stock
__________ __________ (often $1) is an artifact of earlier pre-computer accounting methods used to
track the number of outstanding shares. It has no relation to the actual value of the shares. -
✔✔Par value
__________ __________ are the cumulative total of the earnings that the firm has reinvested in its
assets and operations since its inception. - ✔✔Retained earnings
The combined value of __________ __________ and __________-__________-__________ equals the
proceeds the firm received when it originally sold shares to investors (including initial public
offerings and rights offerings). - ✔✔common stock, paid-in-capital
The __________ __________ entry on a balance sheet records the value of common shares that a firm
currently holds in reserve. - ✔✔treasury stock
The __________ __________ __________ __________ provides a summary of what cash has gone into
and out of a firm because of its operations, investments, and financing activities during a year. It
isolates the firm's operating, investment, and financing cash flows and reconciles them with changes in
its cash and marketable securities during the year. - ✔✔statement of cash flows
, A firm's total cash flows can be conveniently divided into three categories. These include __________
flows, __________ flows, and __________ flows. - ✔✔operating, investment, financing
Operating flows - ✔✔Cash inflows and outflows directly related to the production and sale of
products or services
Investment flows - ✔✔Cash flows associated with the purchase or sale of fixed assets and
business equity
Financing flows - ✔✔Cash flows which result from debt and equity financing transactions
__________ __________ __________ is the amount of cash flow available to investors - the providers of
debt and equity capital. It represents the net amount of cash flow remaining after the firm has met all
operating needs and has made all required payments on both long-term (fixed) and short-term (current)
investments. - ✔✔Free cash flow
__________ current liability changes occur automatically with changes in sales. They must, therefore, be
deducted from current assets in order to find the net change in short-term investment for
the determination of free cash flow. - ✔✔Spontaneous
Can a firm have a net loss (negative NOPAT) and still have positive operating cash flow? - ✔✔Yes, this
can occur when depreciation and other noncash charges during the period are greater than the net loss.
The statement of cash flows treats net income (or net losses) and depreciation and other noncash
charges as separate entries.
A decrease in an asset (such as inventory) is an __________ of cash because cash that has been tied up
in the asset is released and can be used for some other purpose, such as repaying a loan. - ✔✔inflow
An increase in inventory (or any other asset) is an __________ of cash because additional inventory ties
up more of the firm's cash. - ✔✔outflow
Logic suggests that if net income is a cash __________, then a net loss (negative net profit after taxes) is
a cash __________. - ✔✔inflow, outflow
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