Peregrine Exam – Finance Exam
Questions and Answers 100% Verified
RETAINED EARNINGS
Begin retained earnings + Profit/losses- Dividents - ANSWER-An amount earned by a
corporation and not yet distributed to stockholders.
Inventory turnover ratio
COGS/ Average Inventory - ANSWER-ratio showing how many times a company has
sold and replaced inventory during a given period.
ROA - ANSWER-metric that measures the profitability of a business in relation to its
total assets. This ratio indicates how well a company is performing by comparing the
profit (net income) it's generating to the capital it's invested in assets.
INCOME STATEMENTS - ANSWER-A report summarizing a firm's revenues,
expenses, and profits during a reporting period, generally a quarter or a year.
OPERATING MARGINS
Equal to operating income divided by revenue - ANSWER-a profitability ratio measuring
revenue after covering operating and non-operating expenses of a business. Also
referred to as return on sales, the operating income is the basis of how much of the
generated sales is left when all operating expenses are paid off.
Reporting - ANSWER-the financial results of an organization are released to the public.
The key function of the controller.
current ratio = current assest / current liabilities - ANSWER-measures the capability of a
business to meet its short-term obligations that are due within a year.
MUNICIPAL BONDS - ANSWER-Bonds issued by state and local governments
Stock Pricing - ANSWER-determined in part by the total number of shares it issues
AMT (Alternative Minimum Tax) - ANSWER-The alternative minimum tax is the regular
tax plus "tax preference items"
Free Cash Flow - ANSWER-net cash provided by operating activities - capital
expenditures - cash dividends
RATIOS IN DECISION-MAKING - ANSWER-Financial ratio analysis is aimed to assess
the financial performance and determine the financial position of an organization
through its profitability, liquidity, activity, leverage and other relevant indicators.
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