Deck 17: Financial Statements and Projections for Startups

Question 1

Kurt has been given an Excel worksheet with his cash flow statement on it.He, by error, sorted the lines of the statement alphabetically.We need to help Kurt separate his cash flows into two categories: inflows and outflows.Which of the following should be a cash outflow?

A)interest on bank loans and overdrafts
B)customer receipts
C)fixed asset sales
D)bank loans

Answer 1

A

Question 2

The balance sheet shows ______.

A)what the business owns and what the business owes
B)only net worth
C)current expenses
D)shareholder deferred revenue

Answer 2

A

Question 3

When a company has long-term investments, it means they ______.

A)have cash, stocks, bonds, and real estate that has been on their books longer than one year
B)should be selling them soon so they can become short-term profit
C)have more cash than they need and they are wasting it on long-term investments
D)are going for a bank loan

Answer 3

A

Question 4

The three essential financial statements include all of the following EXCEPT ______.

A)balance sheet
B)cash flow statement
C)entrepreneurs scorecard
D)income statement

Question 5

______ is the amount that customers owe to a company after receipt of item(s) purchased.

A)Accounts payable
B)Accounts receivable
C)Accounts deferred
D)Accounts accrued

Question 6

Brynlee paid $500,000 for a company, $100,000 in excess of the book value.Brynlee has ______.

A)$100,000 of expenses
B)paid $100,000 too much for this company
C)goodwill of $100,000
D)badwill of $100,000

Question 7

The financial statement that subtracts cost of goods sold from revenue to arrive at gross profit is is a(n) ______.

A)balance sheet
B)cash flow statement
C)entrepreneurs scorecard
D)income statement

Question 8

Beckett has purchased a business and now has intangible assets.He has ______.

A)assets he cannot touch
B)to balance the books received with a plug amount and this is what it is called
C)patents, software programs, copyrights, trademarks, and/or brand names
D)property, plant, and equipment

Question 9

Arya wants to produce a financial report that shows the amounts the company owes, what it owns, and include her shareholder stake at a particular date in time.She wants to produce a ______.

A)balance sheet
B)cash flow statement
C)entrepreneurs scorecard
D)income statement

Question 10

Kurt has been given an Excel worksheet with his cash flow statement on it.He, by error, sorted the lines of the statement alphabetically.We need to help Kurt separate his cash flows into two categories: inflows and outflows.Which of the following should be a cash inflow?

A)interest on bank loans and overdrafts
B)repayment of dividends to shareholders
C)repayment of loans
D)cash sales

Question 11

Jaylah has a 5-year bank loan with her business.The principle that is scheduled to be paid in the last 4 years is considered ______.

A)a loss
B)a long-term liability
C)a short-term portion of long-term debt
D)operational cash flows

Question 12

Shareholders equity is the same as ______.

A)owners' capital
B)the value of stock
C)paid in capital
D)retained earnings

Question 13

Operating expenses include which of the following?

A)cost of goods sold
B)liabilities, deferred expenses, and assets
C)sales expense and administrative and general expenses
D)amortization and interest expense

Question 14

The cash flow equation coming to Increase/Decrease in Cash from Operations is ______.

A)Net Income plus Depreciation & Amortization plus decrease in assets less decrease in liabilities
B)Net Income plus depreciation and amortization plus increase in liabilities
C)Net Income plus noncash expenses
D)Cash from Operations is the same thing as Net Income

Question 15

Vivienne wants to produce a report that measures her financial performance on a monthly basis.She wants to see selling- and expense-related activities that result in profit or loss over a period of time.She is interested in producing which of the following statements?

A)balance sheet
B)cash flow statement
C)entrepreneurs scorecard
D)income statement

Question 16

The backlog report is ______.

A)the amount of money that the company owes vendors
B)the amount of money due to a company from its customers
C)the orders that have been received but not delivered to the customer
D)the orders that have been delivered to the customer but not yet received

Question 17

Kurt has a 5-year bank loan with his business.The principle that is scheduled to be paid in the first 12 months is considered ______.

A)a loss
B)a long-term liability
C)a short-term portion of long term debt
D)operational cash flows

Question 18

Earnings before interest, taxes, depreciation, and amortization is the same as ______.

A)EBT
B)EBIT
C)EBITDA
D)net income

Question 19

Karter is very busy and wants to produce a financial report that details the inflows and outflows of cash for his company over the last month.He is interested in producing a ______.

A)balance sheet
B)cash flow statement
C)entrepreneurs scorecard
D)income statement

Question 20

______ are assets converted into cash within a year.

A)Cash flow assets
B)Current assets
C)Acid test assets
D)Deferred assets

Question 21

Bill's business has sales of $100,000, inventory of $20,000, cost of goods sold of $31,000, and general and administrative expenses of $45,000.Bill's gross profit is $69,000.

Question 22

Sandy's balance sheet is partially completed.However, she has total assets of $120,000 and total stockholder's equity of $15,000.Her liabilities should total $105,000.

Question 23

Norah is interested in developing her credit policy.She wants to make a policy for which of the following? 

A)the price and timing of raw materials, and other goods and services necessary to build, sell, and support products
B)how pricing will be determined for your products and services
C)the level of compensation and benefits for each type of position in the business
D)the process and timing in which obligations to pay for products and services sold will be billed and collected

Question 24

Capital Equipment and Other Expenditures ______.

A)is a report that accountants prepare for big companies
B)has nothing to do with an entrepreneurship
C)is important if a business wants to attract investors or capital funding/lending
D)is a depreciation expense schedule

Question 25

A linkage between the financial statements includes which of the following?

A)net income from the balance sheet is entered into the income statement
B)net income from the income statement is entered into the retained earnings in the balance sheet
C)assets have to equal liabilities
D)cash is the total expenses on the income report

Question 26

Arabella went to her accountant and learned about DOI, defined as the ______.

A)measures the number of days it takes to collect on accounts receivable
B)measures the average number of days it takes to sell the entire inventory of a company
C)measures the number of days it takes you to pay your bills
D)equals DOI + DSO - DPO

Question 27

Norah is interested in developing her compensation policy.She wants to make a policy for which of the following? 

A)the price and timing of raw materials, and other goods and services necessary to build, sell, and support products
B)how pricing will be determined for your products and services
C)the level of compensation and benefits for each type of position in the business
D)the process and timing in which obligations to pay for products and services sold will be billed and collected

Question 28

Sally is worried about her backlog report.This is a report on orders that have been delivered but not yet paid by the customers.

Question 29

To have a good business plan, ______.

A)purchase it
B)develop it yourself, with professional assistance, and think carefully about the assumptions built into the plan
C)write it on the back of a napkin
D)go to your friends and family for advice

Question 30

Presenting carefully thought-out financial projections to investors is an exercise in lowering perceived risk in both you as an entrepreneur and your idea.

Question 31

Shari discussed her income statement with you and described her report as reporting what the company owes, what it owns, and her shareholder stake at the last day of the prior month.This statement is an income statement.

Question 32

Jax went to his accountant and learned about cash conversion cycle, defined as that which ______.

A)measures the number of days it takes to collect on accounts receivable
B)measures the average number of days it takes to sell the entire inventory of a company
C)measures the number of days it takes you to pay your bills
D)equals DOI + DSO - DPO

Question 33

Norah is interested in developing her purchasing policy.She wants to make a policy for which of the following?

A)the price and timing of raw materials, and other goods and services necessary to build, sell, and support products
B)how pricing will be determined for your products and services
C)the level of compensation and benefits for each type of position in the business
D)the process and timing in which obligations to pay for products and services sold will be billed and collected

Question 34

Jimi is very interested in managing his cash.You mentioned this course to him and tell him about ______.

A)the income statement
B)Cash Convention Report
C)cash conversion cycle
D)adding depreciation and amortization to net income

Question 35

Norah is interested in developing her pricing policy.She wants to make a policy for which of the following? 

A)the price and timing of raw materials, and other goods and services necessary to build, sell, and support products
B)how pricing will be determined for your products and services
C)the level of compensation and benefits for each type of position in the business
D)the process and timing in which obligations to pay for products and services sold will be billed and collected

Question 36

Forecasting sales ______.

A)is difficult
B)requires research to do it right
C)for a pizza operation requires U.S.consumption data, information from U.S.pizzeria owners and industry research reports
D)all of these

Question 37

Janis went to her accountant and learned about DSO, defined as the ______.

A)measures the number of days it takes to collect on accounts receivable
B)measures the average number of days it takes to sell the entire inventory of a company
C)measures the number of days it takes you to pay your bills
D)equals DOI + DSO - DPO

Question 38

Labor estimates are ______.

A)critical to your business plan
B)irrelevant
C)needless as you will be working your business for free and so will your family
D)dependent on your location and nature of work

Question 39

Bill's business has sales of $100,000, inventory of $20,000, cost of goods sold of $31,000, and general and administrative expenses of $45,000.Bill's gross profit is $80,000.

Question 40

Bill's business has sales of $100,000, inventory of $20,000, cost of goods sold of $31,000, and general and administrative expenses of $45,000.Bill's operating profit is $4,000.

Question 41

Provide the line by line format of a balance sheet.

Question 42

Sandy's balance sheet shows assets of $120,000, liabilities of $100,000 and stockholder's equity of $25,000.Her balance sheet is in balance.

Question 43

Describe DSO.

Question 44

Compare and contrast the Balance Sheet and the Statement of Cash Flows.

Question 45

List five examples of cash inflows.

Question 46

Compare and contrast the Income Statement and the Statement of Cash Flows.

Question 47

Goodwill is the price paid for an asset in excess of its book value.This usually occurs when a company acquired another business.

Question 48

Describe DOI.

Question 49

Currents assets are cash and other assets such as inventory, accounts payable, and prepaid expenses that can be converted into cash within a year.

Question 50

Describe how you calculate CCC, Cash Conversion Cycle.

Question 51

List five examples of cash outflows.

Question 52

Provide the line by line format of the Statement of Cash Flows.

Question 53

Provide the line by line format of an income statement.