Wgu c214 exam stuvia - Study guides, Class notes & Summaries

Net Income = - ANSWER-Revenues - Expenses Revenues - Cost of Goods Sold (COGS) - ANSWER-Gross Profit Gross Profit - Operating Expenses - ANSWER-EBIT EBIT = - ANSWER-Sales - Costs - Depreciation EBIT = - ANSWER-Operating Profit or Operating Income EBIT - Interest Expense = - ANSWER-Earnings Before Taxes Earnings before Taxes - Tax Expense = - ANSWER-Net Income (NI) Retained Earnings - ANSWER-End RE = Beg RE + NI - Dividends END RE = - ANSWER-Beg RE + (Sales Revenue X Margi...

How can a private firm appropriately maximize shareholder value? - ANSWER-By making decisions that keep the control of the business with the owners Why are American regulators focused on international investing in a global marketplace? - ANSWER-Because international investing in a global marketplace is the concern of American investors What is one of the two basic types of financial instruments? - ANSWER-Bonds What are the likeliest outcomes if a company outsources the manufacturing of ...

If accounts receivable increases, what is the impact on CFO? - ANSWER-CFO decreases Are actual taxes paid the same as how on the GAAP income statement? - ANSWER-No. Actual Taxes = IRS Rules Income Statement = GAAP Which decisions require using subjective estimates? - ANSWER-Economic life of a new asset. If there is a 30% change of a recession, what is the probability of expansion? - ANSWER-70% *The sum of probabilities must equal 100% How much interest is paid on a 6% bond ove...

Discretionary Financing Needed Formula - Answer Discretionary Financing Needed (DFN) = Projected Total Asset - Projected Total Liabilities - Projected Equity Sustainable Growth Rate Formula - Answer Sustainable Growth Rate (SGR) = Return on Equity (ROE) X (1-Divided Payout Ratio) Cash Flow from Operating Activities (CFO) Formula - Answer Cash Flow from Operating Activities (CFO) = Net Income + Depreciation +/- Decreases/Increases in Current Assets +/- Increase/Decrease in Current Liabiliti...

What standards are used to help US investors understand and compare foreign financial statements to domestic financial statements? - ANSWER-International Financial Reporting Standards When a company is optimizing its resources and maintaining or improving productivity, they are engaging in what hypothesis - ANSWER-Efficient Market Hypothesis What is the basic type of negotiable debt? - ANSWER-Bonds What is the characteristic of a stock sold in the secondary markets? - ANSWER-Stocks sold...

Initial Outlay - ANSWER-The total dollar amount to begin a project. Cost of Equity - ANSWER-How much it costs a firm (in percentage terms) to use equity financing. From the investor's perspective, it is what they require given the riskiness/opportunity cost of the company. From the companies perspective, it is the same rate, but it is what it "costs" to attract those potential investors. It is the return they must give investors for them to invest with their company. American Depository...

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...

Characteristics of preferred stock includes - ANSWER--dividends in arrears -dividends are cumulative -higher payoff claim in a BK (has first dibs in a BK) -considered "hybrid" (part stock/part bond) -no fixed maturity date -no voting rights -can skip dividend payments -dividends don't change year-after-year -used in start ups (IPO) Preferred stock dividends - ANSWER-can go without payment and pay in arrears the following year Characteristics of common stock are - ANSWER--voting ...

Statement of Cash Flows - ANSWER-Shows the change in cash balance for a period of time. Focuses only on items where cash is received, or cash is paid. Cash Flow from Operating Activities (CFO) - ANSWER-Cash flow that a company generates as a result of day-to-day business operations. Deals with Current Assets and Current Liabilities. Cash Flow from Investing Activities (CFI) - ANSWER-Cash flow that is generated from investments in long term assets. Cash Flow from Financing Activities (CF...

Statement of Cash Flows - ANSWER-Shows the change in cash balance for a period of time. Focuses only on items where cash is received, or cash is paid. Cash Flow from Operating Activities (CFO) - ANSWER-Cash flow that a company generates as a result of day-to-day business operations. Deals with Current Assets and Current Liabilities. Cash Flow from Investing Activities (CFI) - ANSWER-Cash flow that is generated from investments in long term assets. Cash Flow from Financing Activities (CF...