BFIN 300 Exam 3 Questions With Solutions
solvency the value of your assets exceeds the value of liabilities
market value the price that assets, liabilities, or equity can be bought or sold
book value The cost of a fixed asset less accumulated depreciation.
income statement purpose measures fina...
solvency the value of your assets exceeds the value of liabilities
market value the price that assets, liabilities, or equity can be bought or sold
book value The cost of a fixed asset less accumulated depreciation.
income statement purpose measures financial performance over a period of time
income = Revenue - Expenses
Income Statement Equation sales
-costs
-depreciation
-interest
----------------
EBT
x tax rate
, BFIN 300 Exam 3 Questions With Solutions
-----------------
taxes
EBIT
-taxes
---------
Net Income
income statement analysis (3 things to consider) -GAAP
-non-cash items (ex. depreciation, deferred taxes, net income)
-time & costs (in the long run, all inputs are variable; in short run, some are fixed and some are
variable)
what are non-cash items expenses that don't directly affect cash flow
Marginal vs. Average tax rates marginal= the % paid on the next dollar earned
avg= the tax bill/taxable income
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