Business Financial Intelligence Quiz! Survey

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* 1. How would you define revenue?

Cash received for products or services invoiced for

Monies earned regardless of whether the products or services have been provided

Monies earned for products and services provided

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* 2. How would you define net income?

Profit after deducting all expenses

Revenue minus cost of goods sold

Profit before interest, tax, depreciation and amortization

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* 3. How would you define earnings per share?

Revenue divided by issued shares

Net income divided by authorized share capital

Net income divided by outstanding shares

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* 4. What is the word "return" also known as?

Earnings and net income

Revenue minus accounts receivable

Non-renewed annual policies

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* 5. What is Diluted Earnings Per Share?

Same as Basic EPS adjusted for the effects of foreign currency exchange movements

The Basic EPS adjusted to take into account current liabilities of the business

The Basic EPS adjusted to take into account debt instruments that could convert into equity

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* 6. How is profit margin calculated?

Net income divided by total revenue

Net income divided by (total revenue + accounts receivable)

Revenue - unearned premium

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* 7. What's the difference between cash and cashflow?

Cash is on the balance sheet and cashflow is on the income statement

Earned premium is treated as cash whereas unearned premium is cashflow not received

Cash is a snapshot at a period in time and cashflow is the difference between two points in time

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* 8. What are the three types of cashflow in business?

1. Operating 2. Investing 3. Financing

1. Billed not received 2. Billed and received 3. Not yet billed

1. Investing 2. Sale of shares owned in other companies 3. Paid accounts receivable

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* 9. What is unearned revenue?

Accounts receivable - accounts payable

Where we've provided the product or service but not yet been paid

Where we've been paid but haven't yet provided the product or service

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* 10. What are three elements of the income statement?

Income, expenses and profit/loss

Income, assets and equity

Assets, liabilities and equity

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* 11. What are three elements of the balance sheet?

Operating, investing and financing cashflow

Income, equity and expenses

Assets, liabilities and equity

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* 12. What are three elements of the statement of cashflow?

Income, assets and equity

Income, expenses and profit/loss

Operating, investing and financing cashflow

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* 13. What's the difference between organic and inorganic growth?

Inorganic is growth through mergers and acquisitions whereas organic growth is through existing business

Organic is growth through mergers and acquisitions whereas inorganic growth is through existing business

Inorganic is growth from new business and organic is selling more to existing customers

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* 14. What are the two types of financing for a business?

Short-term and long-term loans

Debt and equity

Common stock and bank loans

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* 15. If a business's net income is greater than its cost of capital, we call it:

Negative economic value-added but positive yield

Upward revenue trend of 5 years or more

Creating shareholder value or economic value-added

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* 16. What's the difference between assets, liabilities and equity?

Assets are what we own | liabilities are what we owe others | equity is what we owe the shareholders

Assets are what we own | liabilities are what we owe just banks | equity is what shareholders owe us

Assets are what we've earned | liabilities are what we own | equity is income minus expenses

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* 17. "Hurdle rate" is another phrase for what?

The cost of capital

The relationship between expenses and income

How quickly we receive payment

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* 18. What are the four main aspects of working capital?

Cash | Profits | Accounts Receivable | Inventory

Equity capital - debt capital

Cash | Accounts Receivable | Accounts Payable | Inventory

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* 19. What are the three types of profit in most businesses?

Gross, operating and net

Operating, net and revenue - sales tax

Gross, operating and free cashflow

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* 20. Why do companies do stock buybacks?

Increase the Earnings Per Share

Sends a positive signal out to the market that the company believes its stock is undervalued

Can serve as a protective measure against potential acquistion

Enables the company to make money on their own Treasury Stock when they resell the stock

All of the above!