Understanding Financial Terms

What is the process of outlining how to allocate financial resources called?

• Investing

• Saving

• Forecasting

• Budgeting

What term describes creating a financial plan that forecasts income and expenses?

• Budgeting

• Investing

• Accounting

• Saving

Which technique evaluates a company's financial performance using various ratios?

• Market Share Assessment

• Cost-Benefit Analysis

• Financial Ratio Analysis

• SWOT Analysis

What is the term for monitoring and controlling cash flows to ensure liquidity?

• Cash Management

• Cash Flow Analysis

• Liquidity Assessment

• Financial Forecasting

What is the evaluation and selection of investment opportunities to enhance a company's value called?

• Financial forecasting

• Market analysis

• Capital budgeting

• Risk assessment

What process involves identifying, analyzing, and controlling financial risks?

• Financial Planning

• Risk Management

• Investment Strategy

• Budgeting Techniques

What term refers to determining the mix of debt and equity used to finance a company's operations?

• equity ratio

• debt financing

• financial leverage

• capital structure

What is the primary goal of financial planning?

• To maximize investment returns only.

• To avoid any financial risks completely.

• To minimize expenses at all costs.

• To ensure financial goals and obligations are met.

How does budgeting help in achieving financial goals?

• Budgeting restricts spending and leads to financial stress.

• Budgeting has no impact on long-term financial planning.

• Budgeting provides a structured approach to manage finances, enabling the achievement of financial goals.

• Budgeting is only necessary for large corporations.

What role does risk management play in a company's financial strategy?

• Risk management is essential for minimizing financial losses and making informed strategic decisions.

• Risk management is irrelevant to financial planning.

• Risk management focuses solely on employee safety.

• Risk management is only necessary for large corporations.