Adventis Training Level 1 Exam | Questions with Answers | Already Passed
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Course
Adventis
Institution
Adventis
Adventis Training Level 1 Exam | Questions
with Answers | Already Passed
financial statement reportsincome statement, balance sheet, cash flow statement
what do financial statements communicate- financial condition
- results of operations
- various other activities of an organization
Financi...
Adventis Training Level 1 Exam | Questions with Answers | Already Passed financial statement reports ✔✔income statement, balance sheet, cash flow statement what do financial statements communicate ✔✔- financial condition - results of operations - various other activities of an organization Financial Statement do for stakeholders ✔✔provide large amount of information that enable them to make decisions board of directors using financial data ✔✔hold management accountable and make board -level decision about corporate strategy company management using financial data ✔✔measure performance and make strategic, operating and financial decisions creditors using financial data ✔✔measure creditworthiness, liquidity and bankruptcy risk investors using financial data ✔✔make decisions on buying or selling equity investments acquirers using financial data ✔✔determine valuation and make investment decisions regulators using financial data ✔✔determine whether the company is operating according to regulations and the law income statement ✔✔presents the results of operations over a period of time purpose of income statement ✔✔show stakeholders whether the company made or lost money during the period being reported revenue (sales) ✔✔the amount charged for the delivery of goods or services cost of sales (cost of goods sold) ✔✔direct cost of producing revenue (raw materials, direct wages) gross profit ✔✔how efficiently labor and supplies are used in the production process (revenues less cost of sales) operating expenses ✔✔all other expenses required to run the business (management salaries, marketing, travel) operating income (EBIT) ✔✔indicates a company's earning power from ongoing operations (revenue less cost of sales and operating expenses) non-operating expenses ✔✔expenses or income not related to the regular business of the company (interest expense, restructuring expenses) corporate taxes ✔✔local and federal income taxes the company incurs net income (net earnings) ✔✔indicates the increase in shareholders' value resulting from operations (revenue less all expenses of the company) balance sheet ✔✔shows an organization's financial position at a particular point in time cash✔✔current assets comprising currency or currency equivalents that can be accessed immediately accounts receivable ✔✔amount owed to an organization from the sale of its products or services fixed assets ✔✔value of assets and property that can't easily be converted to cash and has useful life or greater than 1 year (property, plant & equipment) accounts payable ✔✔amount owed to an organization's vendors debt✔✔amount of obligations owed to cerditors equity✔✔cumulative shareholder investment plus cumulative net income working capital ✔✔measure of a company's efficiency and its short -term financial health (non -
cash current assets minus non -debt current liabilities) non-cash current assets ✔✔all assets besides cash that are expected to be converted into cash within the year (accounts receivable, inventory, prepaid expenses, other assets) non-debt liabilities ✔✔all obligations besides short -term debt that are due within the year (accounts payable, accrued liabilities, other obligations) debt vs equity ✔✔debt less expensive form of capital, less risky, have priority claims on a company's assets net debt✔✔total debt less cash, primarily used in credit analysis cash flow statement ✔✔shows how much cash is generated or lost during a period of time
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