Mastering Financial Forecasting Techniques

What is the primary purpose of cash flow analysis in financial forecasting?

• To determine the profitability of a company

• To assess the liquidity and cash position of a company

• To evaluate the company's market share

• To calculate the company's tax obligations

Which of the following is a key component of a cash flow statement?

• Net income

• Depreciation

• Operating activities

• Shareholder equity

In break-even analysis, what does the break-even point represent?

• The point where total revenue equals total costs

• The point where total assets equal total liabilities

• The point where net profit is maximised

• The point where cash flow is zero

Which formula is used to calculate the break-even point in units?

What does the current ratio measure in ratio analysis?

• The profitability of a company

• The liquidity of a company

• The efficiency of a company

• The market value of a company

Which of the following is considered a liquidity ratio?

• Debt-to-equity ratio

• Return on equity

• Current ratio

• Price-to-earnings ratio

In cash flow analysis, which of the following is NOT a cash inflow?

• Sale of goods

• Loan repayment

• Investment income

• Sale of assets

What is the formula for calculating the quick ratio?

Which of the following is a limitation of break-even analysis?

• It assumes variable costs are constant

• It provides a clear profit margin

• It considers changes in market conditions

• It includes all fixed costs

What does the debt-to-equity ratio indicate in ratio analysis?

• The company's ability to pay short-term obligations

• The proportion of debt used to finance the company's assets

• The company's profitability

• The company's market value