Business 599 week 3 quiz

You and Bob are enrolled together in a course on financial management. You missed the class last Friday, and Bob copied his lecture notes for you to study. Unfortunately, after reading the book, you believe the following statements in Bob's notes are incorrect:

A - "The amount money needed to borrow and invest in the purchase of land for expansion is a function of working capital management."
B - "The financial manager acts in the best interest of management."
C - "The general partners in a partnership are the only type of business owners that can be sued for their personal property to resolve the business' debt."
D - "The main purpose of financial management is to increase revenue annually by a percentage set by the Board of Directors."
E - "Management and owners generally agree on investment decisions because both are acting in the best interest of the company."
F - "All of the cash generated by a company's operations is either re-invested in assets or used to pay off debt."

What changes should Bob make to Statement F?

XYZ Company went out of business and was sold to pay off as much debt as possible. It showed the following information on its balance sheet. What, if any revenue will the shareholders receive?

Current assets $700,000
Fixed assets $1,500,000
Current liabilities $387,000
Long-term liabilities $945,000

Bob Lawson is the president of his company; his CFO is Mark Ziegler. Like many entrepreneurs, Bob is more concerned about the big picture and leaves the day-to-day accounting details up to Mark. Bob reviews the financial statements regularly; however, Mark would like to help him understand how to make better use of the company's financial statements to gauge the changes in his business and plan for the future. Even though Mark generates all statements in terms of dollars and percents (common-size statements), Bob ignores the common-size statements. The two have agreed to meet next week.

Mark plans to begin his coaching with the following topics:

• Making comparisons using standardized financial statements
• Calculating and understanding performance ratios
• Determining the company's profitability and growth
• Drawbacks associated with financial statement comparisons

Mark knows that Bob does not want to spend a lot of time pouring over his financial statements. Which of the following statements would be helpful if Mark wanted to suggest an easy way to remember how certain factors affect his company's ROA?

You and Bob are enrolled together in a course on financial management. You missed the class last Friday, and Bob copied his lecture notes for you to study. Unfortunately, after reading the book, you believe the following statements in Bob's notes are incorrect:

A - "The amount money needed to borrow and invest in the purchase of land for expansion is a function of working capital management."
B - "The financial manager acts in the best interest of management."
C - "The general partners in a partnership are the only type of business owners that can be sued for their personal property to resolve the business' debt."
D - "The main purpose of financial management is to increase revenue annually by a percentage set by the Board of Directors."
E - "Management and owners generally agree on investment decisions because both are acting in the best interest of the company."
F - "All of the cash generated by a company's operations is either re-invested in assets or used to pay off debt."

What changes should Bob make to Statement D?

You and Bob are enrolled together in a course on financial management. You missed the class last Friday, and Bob copied his lecture notes for you to study. Unfortunately, after reading the book, you believe the following statements in Bob's notes are incorrect:

A - "The amount money needed to borrow and invest in the purchase of land for expansion is a function of working capital management."
B - "The financial manager acts in the best interest of management."
C - "The general partners in a partnership are the only type of business owners that can be sued for their personal property to resolve the business' debt."
D - "The main purpose of financial management is to increase revenue annually by a percentage set by the Board of Directors."
E - "Management and owners generally agree on investment decisions because both are acting in the best interest of the company."
F - "All of the cash generated by a company's operations is either re-invested in assets or used to pay off debt."

What changes should Bob make to Statement B?

Bob Lawson is the president of his company; his CFO is Mark Ziegler. Like many entrepreneurs, Bob is more concerned about the big picture and leaves the day-to-day accounting details up to Mark. Bob reviews the financial statements regularly; however, Mark would like to help him understand how to make better use of the company's financial statements to gauge the changes in his business and plan for the future. Even though Mark generates all statements in terms of dollars and percents (common-size statements), Bob ignores the common-size statements. The two have agreed to meet next week.

Mark plans to begin his coaching with the following topics:

• Making comparisons using standardized financial statements
• Calculating and understanding performance ratios
• Determining the company's profitability and growth
• Drawbacks associated with financial statement comparisons

Now that Bob has a better understanding of financial ratios, he's anxious to begin comparing last year's performance with this year's performance. What-96;initial advice should Mark offer?