Finance quiz Name . Adm no. Attempt all questions.

Finance quiz

Name …………………………………………………….

Adm no……………………………………………………

Attempt all questions.

Q: Why do capital expenditures increase assets (PP&E), while other cash outflows, like paying salary, taxes, etc., do not create any asset, and instead instantly create an expense on the income statement that reduces equity via retained earnings?

Q: Walk me through a cash flow statement.

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Q: What is working capital?

Q: Is it possible for a company to show positive cash flows but be in grave trouble?

Q: How is it possible for a company to show positive net income but go bankrupt?

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Q: I buy a piece of equipment, walk me through the impact on the 3 financial statements.

Q: Why are increases in accounts receivable a cash reduction on the cash flow statement?

Q: How is the income statement linked to the balance sheet?

Q: What is goodwill?