Financial management class 1

What are assets 

• A company's legal debts or obligations that arise during the course of business operations. 
• The value of an asset less the value of all liabilities on that assets
• Resources that will give companies economic advantages in the future 
• Assets are financial products that are easily converted to cash

What is the difference between current and non current assets?

• There is no difference
• Current assets are the same as current liabilities and non current are not  
• Current assets tend to be easily converted to cash whereas non current are not 
• A company will gain more profit if they use non current only 

Which one of the following is true 

• People are the most valuable asset to any company and are therefore posted on the balance sheet
• Employees are never on the balance sheet 
• It is hard to valuate your employees therefore they tend to NOT be on the balance sheet
• Employees are not on the balance sheet since they unions do not want them to be 

A loan from a bank would should up on the balance sheet as a

• Asset
• Equity 
• Share
• Liability 

Profitability ratios relate to...

• Used to measure a company's ability to meet long-term obligations.
• Closely related to sales, important condition for a firm's continuity.
• Return on long term debt 
• ability to meet its short Termfinancial obligations

Which of the following is true

• Gross profit is the first item on a cashflow statement
• Repayment of debt does not lead to a change in equity
• The ROI per definition tells investors how to deal with employee costs 
• Equity on a balance sheets always equals all assets 

I buy a car from you now but we agree that I will pay you in one year, you can now... 

• Record the sale as a receipt 
• Record the sale as revenue 
• Put the amount of money to be paid on your cashflow statement
• Start depreciation the car for one year 

The difference between the equity in year 1 and year 2 usually equals...

• The total costs 
• The total depreciation 
• The profit 
• The cash out 

Which of the following is not one of the three most common used financial statements

• Profit ratio
• Income statement
• Cash flow statement
• Balance sheet 

What is the first name of the dean of the AMA

• Harry
• Guido
• Caroline
• Wim