Financial Concepts Quiz

What is the formula to calculate the ending cash balance?

• Beginning Cash Balance - Net Income

• Beginning Cash Balance + Cash Inflows - Cash Outflows

• Beginning Cash Balance - Cash Outflows

• Net Income - Cash Inflows

The burn rate of a company typically refers to:

• The rate at which a company is generating profits

• The rate at which a company is using up its cash reserves

• The rate at which a company is paying off its debts

• The rate at which a company is increasing its inventory

What is the six month run rate of a business that currently earns a revenue of $3000?

• $3000

• $36000

• $18000

• $12000

Which of the following best defines cash flow in a business context?

• The total revenue generated by a company

• The movement of money in and out of a business

• The profits earned by a company

• The amount of cash and cash equivalents a company holds

Business A and Business B are similar businesses. At the end of the period Business A had a burn rate of $4000 and Business B had a burn rate of -$300. Which of the following statements is correct?

• Both businesses spent the same amount of cash

• Business B generated cash rather than spending it during the period

• Business A generated cash rather than spending it during the period

• Both businesses cash balance decreased during the period