FINANCIAL ANALYSIS (FIN 202) MT REVISION

The Cash Flow Statement is directly linked to which statement through cash as an asset?

• Income Statement

• Balance Sheet

• Owner’s Equity Statement

• Trial Balance

An increase in revenue on the income statement most likely results in:

• Decrease in liabilities

• Increase in cash inflows

• Increase in depreciation

• Decrease in equity

If Accounts Receivable decreases, it means:

• Customers paid their dues, so cash inflow increases

• Company owes suppliers

• Cash outflow increases

• Liabilities decreased

If Accounts Payable increases, what happens?

• Cash inflow decreases

• Cash outflow decreases

• Assets increase

• Equity decreases

Depreciation appears as:

• Asset on Balance Sheet and income on Income Statement

• Operating expense on Income Statement, non-cash adjustment on Cash Flow Statement

• Cash inflow under investing activities

• Liability on Balance Sheet

Which of the following is a cash outflow?

• Issuance of equity

• Issuance of debt

• Stock buyback

• Decrease in accounts payable

Capital Expenditure (Capex) affects which statements?

• Only Income Statement

• Balance Sheet (increases PP&E) and Cash Flow Statement (cash outflow)

• Only Balance Sheet

• Only Cash Flow Statement

An increase in Net Working Capital (NWC) indicates:

• More cash available

• Cash inflow

• Cash outflow

• No cash impact

A decrease in Net Working Capital means:

• Cash inflow

• Cash outflow

• No effect

• Increase in assets

Retained Earnings formula is:

• Ending Balance = Beginning + Revenue – Expenses

• Beginning + Net Income – Dividends

• Assets – Liabilities

• Total Equity – Capital