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13 WGU C214 Financial Management Final Exam 1.Statement of Cash Flows ANS Shows the change in cash balance for a period of time. Focuses only on items where cash is received, or cash is paid.
2.Cash Flow from Operating Activities (CFO) ANS Cash flow that a company gener- ates as a result of day-to-day business operations. Deals with Current Assets and Current Liabilities.
3.Cash Flow from Investing Activities (CFI) ANS Cash flow that is generated from investments in long term assets.
4.Cash Flow from Financing Activities (CFF) ANS Cash flow that is used to fund the company. Cash flow that is generated from financing the business. Includes Debt & Equity.
5.How does an increase in Accounts receivable impact CFO?ANS An Increase in Accounts receivable will decrease CFO 1 / 2
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13 6.How does an increase in Accounts payable impact CFO?ANS An Increase in Accounts Payable will increase CFO 7.What financial statement is prepared at a point in time ANS Balance Sheet 8.What financial statements are prepared for a period of time?ANS · Income Statement ·Retained Earnings Statement ·Statement of Cash Flows 9.Define Efficient Frontier ANS Maximizes expected return for a given level of risk 10.Where would a risk averse investor fall on the efficient frontier?ANS 100% Bonds 11.Where would a risk-taking investor fall on the efficient frontier?ANS 100% Stocks 12.What is a Beta?ANS A Measure of Risk - A Beta 1 is the average risk of all stocks.Anytime a beta is below 1, it is less risk. If it is more than 1, it is high risk.
13.Define efficient market hypothesis as it relates to a firm?