Financial Management

According to International Accounting Standards(IAS 1) the objective of general purpose financial statements is to provide information about the financial position, financial performance, and cash flows of an entity that is useful to a wide range of users in making economic decisions.

• True

• False

A report of a company's financial worth in terms of book value. It is broken into three parts to include a company’s assets, liabilities, and shareholders' equity.

• Balance Sheet

• Income Statement

• Cashflow Statement

• Statement of Changes in Equity

Breaks down the revenue a company earns against the expenses involved in its business to provide a bottom line, net income profit or loss.

• Balance Sheet

• Income Statement

• Cashflow Statement

• Statement of Changes in Equity

Stockholders' equity refers to the assets remaining in a business once all liabilities have been settled.

• True

• False

A negative stockholders' equity may indicate an impending bankruptcy.

• True

• False

Provides an overview of the company's cash flows from operating activities, investing activities, and financing activities.

• Cashflow Statement

• Balance Sheet

• Income Statement

• Statement of Changes in Equity

Financial statement fraud is the manipulation of the information used to prepare the financial statements released to the public and financial institutions.

• True

• False

Financial statement analysis is the process of analyzing a company's financial statements for decision-making purposes.

• True

• False

A method of financial statement analysis in which each line item is listed as a percentage of a base figure within the statement.

• Vertical Analysis

• Horizontal Analysis

• Ratio Analysis

• Financial Benchmarking

A financial statement analysis method which compare historical data, such as ratios, or line items, over a number of accounting periods.

• Vertical Analysis

• Horizontal Analysis

• Ratio Analysis

• Financial Benchmarking