1. What financial metric measures a company’s profitability and is calculated by dividing its net earnings by the number of outstanding shares?
A. Price-to-Earnings Ratio (P/E Ratio)
B. Dividend Yield
C. Earnings Per Share (EPS)
D. Market Capitalization
Explanation: Earnings Per Share (EPS) is a financial metric that measures a company’s profitability on a per-share basis.It’s calculated by dividing net earnings by the number of outstanding shares.
2. What is the term for a company’s earnings after deducting all operating expenses, interest, and taxes?
A. Gross Earnings
B. Operating Earnings
C. Net Earnings
D. Revenue
Explanation: Net Earnings represent a company’s profit after deducting all operating expenses, interest, and taxes.
3. In the context of earnings reports, What term is used for the difference between a company’s actual earnings and the earnings expected by analysts and the market?
A. Earnings Surprise
B. Earnings Deficit
C. Earnings Consistency
D. Earnings Stability
Explanation: An Earnings Surprise occurs when a company’s actual earnings differ from the earnings expected by analysts and the market.
4. What financial statement provides a detailed breakdown of a company’s revenues, costs, and expenses, showing how net earnings were derived?
A. Balance Sheet
B. Income Statement
C. Cash Flow Statement
D. Statement of Retained Earnings
Explanation: The Income Statement provides a detailed breakdown of a company’s revenues, costs, and expenses, ultimately showing how net earnings were derived.
5. What is the term for a company’s earnings distributed to its shareholders, usually on a per-share basis?
A. Net Earnings
B. Retained Earnings
C. Dividend
D. Operating Earnings
Explanation: Dividends are a portion of a company’s earnings distributed to its shareholders, typically on a per-share basis.
6. What financial metric measures a company’s ability to generate profit from its shareholders’ equity and is calculated by dividing net earnings by shareholders’ equity?
A. Return on Assets (ROA)
B. Return on Investment (ROI)
C. Return on Equity (ROE)
D. Earnings Before Interest and Taxes (EBIT)
Explanation: Return on Equity (ROE) measures a company’s ability to generate profit from shareholders’ equity and is calculated by dividing net earnings by shareholders’ equity.
7. What is the term for a company’s earnings before interest, taxes, depreciation, and amortization, often used as a measure of its operating performance?
A. Net Earnings
B. Gross Earnings
C. EBITDA
D. Operating Income
Explanation: EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization and is used as a measure of a company’s operating performance.
8. What term represents the portion of a company’s earnings that it retains and reinvests in the business rather than distributing as dividends?
A. Dividend
B. Retained Earnings
C. Net Profit Margin
D. Operating Profit
Explanation: Retained Earnings represent the portion of a company’s earnings that it retains and reinvests in the business rather than distributing as dividends.
9. What is the term for the ratio that compares a company’s stock price to its earnings per share (EPS)?
A. Price-to-Book Ratio (P/B Ratio)
B. Price-to-Earnings Ratio (P/E Ratio)
C. Dividend Yield
D. Earnings Per Share (EPS) Ratio
Explanation: The Price-to-Earnings (P/E) Ratio compares a company’s stock price to its earnings per share (EPS).
10. What term refers to a company’s total earnings before interest and taxes, often used to assess its operational profitability?
A. Operating Earnings
B. Net Earnings
C. Gross Earnings
D. Revenue
Explanation: Operating Earnings represent a company’s total earnings before interest and taxes and are often used to assess its operational profitability.
11. What financial statement provides a snapshot of a company’s financial position at a specific point in time, showing its assets, liabilities, and shareholders’ equity?
A. Income Statement
B. Cash Flow Statement
C. Balance Sheet
D. Statement of Retained Earnings
Explanation: The Balance Sheet provides a snapshot of a company’s financial position, including its assets, liabilities, and shareholders’ equity, at a specific point in time.
12. What term represents the total value of a company’s assets after deducting its liabilities and is a key component of the Balance Sheet?
A. Gross Profit
B. Net Income
C. Stockholders’ Equity
D. Net Asset Value (NAV)
Explanation: Net Asset Value (NAV) is the total value of a company’s assets after deducting its liabilities and is a key component of the Balance Sheet.
13. What type of assets on the Balance Sheet includes items like cash, accounts receivable, and inventory that can be easily converted into cash within a short period?
A. Current Assets
B. Fixed Assets
C. Intangible Assets
D. Deferred Assets
Explanation: Current Assets are items like cash, accounts receivable, and inventory that can be easily converted into cash within a short period.
14. What term on the Balance Sheet represents the obligations or debts a company owes to external parties, such as loans and accounts payable?
A. Current Liabilities
B. Long-Term Liabilities
C. Total Liabilities
D. Equity
Explanation: Total Liabilities on the Balance Sheet represent the obligations or debts a company owes to external parties.
15. What is the term for the portion of shareholders’ equity on the Balance Sheet that represents the original investment made by shareholders in exchange for ownership?
A. Retained Earnings
B. Common Stock
C. Preferred Stock
D. Treasury Stock
Explanation: Common Stock represents the original investment made by shareholders in exchange for ownership and is a component of shareholders’ equity.
16. What term represents the portion of a company’s earnings that it has retained and reinvested in the business, often shown on the Balance Sheet under shareholders’ equity?
A. Dividends
B. Net Income
C. Retained Earnings
D. Operating Income
Explanation: Retained Earnings represent the portion of a company’s earnings that it has retained and reinvested in the business, often shown on the Balance Sheet under shareholders’ equity.
17. What is the term for the difference between a company’s total assets and total liabilities, representing the net value of the company’s assets owned by shareholders?
A. Gross Profit
B. Net Income
C. Stockholders’ Equity
D. Working Capital
Explanation: Stockholders’ Equity is the difference between a company’s total assets and total liabilities, representing the net value of the company’s assets owned by shareholders.
18. On the Balance Sheet, What type of assets includes items like buildings, equipment, and land, which have a longer useful life and are not easily converted into cash?
A. Current Assets
B. Fixed Assets
C. Intangible Assets
D. Deferred Assets
Explanation: Fixed Assets on the Balance Sheet include items like buildings, equipment, and land, which have a longer useful life and are not easily converted into cash.
19. What term represents a company’s obligations or debts that are due within one year and are shown on the Balance Sheet under liabilities?
A. Current Liabilities
B. Long-Term Liabilities
C. Total Liabilities
D. Equity
Explanation: Current Liabilities on the Balance Sheet represent a company’s obligations or debts that are due within one year.
20. What is the term for the portion of shareholders’ equity on the Balance Sheet that represents the cumulative earnings retained by the company over time?
A. Common Stock
B. Preferred Stock
C. Retained Earnings
D. Treasury Stock
Explanation: Retained Earnings on the Balance Sheet represent the cumulative earnings retained by the company over time, a component of shareholders’ equity.
21. What financial statement provides information about a company’s cash inflows and outflows during a specific period, including operating, investing, and financing activities?
A. Income Statement
B. Balance Sheet
C. Cash Flow Statement
D. Statement of Retained Earnings
Explanation: The Cash Flow Statement provides information about a company’s cash inflows and outflows, including operating, investing, and financing activities during a specific period.
22. What term represents the cash generated or used by a company’s core operating activities and is a key component of the Cash Flow Statement?
A. Operating Cash Flow
B. Investing Cash Flow
C. Financing Cash Flow
D. Free Cash Flow
Explanation: Operating Cash Flow represents the cash generated or used by a company’s core operating activities and is a key component of the Cash Flow Statement.
23. What is the term for cash received or paid as a result of buying or selling long-term assets such as equipment, property, or investments, as shown in the Cash Flow Statement?
A. Operating Cash Flow
B. Investing Cash Flow
C. Financing Cash Flow
D. Net Cash Flow
Explanation: Investing Cash Flow represents cash received or paid as a result of buying or selling long-term assets, such as equipment or investments.
24. What term represents the cash received or paid as a result of raising capital through debt or equity financing, as shown in the Cash Flow Statement?
A. Operating Cash Flow
B. Investing Cash Flow
C. Financing Cash Flow
D. Net Cash Flow
Explanation: Financing Cash Flow represents cash received or paid as a result of raising capital through debt or equity financing.
25. On the Cash Flow Statement, What is the term for the net result of a company’s cash inflows and outflows, indicating whether it generated or used cash during a specific period?
A. Operating Cash Flow
B. Investing Cash Flow
C. Financing Cash Flow
D. Net Cash Flow
Explanation: Net Cash Flow on the Cash Flow Statement indicates the net result of a company’s cash inflows and outflows, showing whether it generated or used cash during a specific period.
26. What term represents the amount of cash a company generates after deducting its capital expenditures from its operating cash flow, often used to assess financial strength and investment opportunities?
A. Operating Cash Flow
B. Investing Cash Flow
C. Financing Cash Flow
D. Free Cash Flow
Explanation: Free Cash Flow is the amount of cash generated after deducting capital expenditures from operating cash flow and is used to assess financial strength and investment opportunities.
27. What does a positive Free Cash Flow indicate about a company’s financial health?
A. The company is in financial distress.
B. The company is generating excess cash.
C. The company is incurring heavy debts.
D. The company is facing liquidity issues.
Explanation: A positive Free Cash Flow indicates that a company is generating more cash than it needs for its operations, suggesting financial strength.
28. What term represents the ratio of a company’s operating cash flow to its current liabilities and is used to assess its short-term liquidity?
A. Quick Ratio
B. Current Ratio
C. Operating Ratio
D. Cash Ratio
Explanation: The Quick Ratio is the ratio of a company’s operating cash flow to its current liabilities and is used to assess short-term liquidity.
29. What is the term for the portion of a company’s cash flow that represents its core operating activities, including sales, expenses, and taxes?
A. Operating Cash Flow
B. Investing Cash Flow
C. Financing Cash Flow
D. Net Cash Flow
Explanation: Operating Cash Flow represents the portion of a company’s cash flow related to its core operating activities, such as sales, expenses, and taxes.
30. On the Cash Flow Statement, What term represents the cash received or paid as a result of debt issuances or repayments, dividend payments, and changes in equity, among other financing activities?
A. Operating Cash Flow
B. Investing Cash Flow
C. Financing Cash Flow
D. Net Cash Flow
Explanation: Financing Cash Flow on the Cash Flow Statement represents cash received or paid as a result of various financing activities, including debt issuances, repayments, and dividend payments.
31. What term refers to the portion of a company’s earnings that it distributes to its shareholders on a per-share basis?
A. Net Earnings
B. Retained Earnings
C. Dividend
D. Operating Earnings
Explanation: Dividends are the portion of a company’s earnings distributed to its shareholders on a per-share basis.
32. What type of investors often seek stocks that offer consistent and reliable dividend payments as a source of income?
A. Growth Investors
B. Value Investors
C. Income Investors
D. Speculative Investors
Explanation: Income investors seek stocks that offer consistent and reliable dividend payments as a source of income.
33. What is the term for a company’s dividend payment expressed as a percentage of its stock’s current market price?
A. Dividend Yield
B. Dividend Ratio
C. Dividend Payout
D. Dividend Rate
Explanation: Dividend Yield is the percentage of a company’s dividend payment in relation to its stock’s current market price.
34. What term represents the percentage of earnings a company pays out as dividends to its shareholders?
A. Dividend Yield
B. Dividend Payout Ratio
C. Dividend Growth Rate
D. Dividend Coverage Ratio
Explanation: The Dividend Payout Ratio represents the percentage of earnings a company pays out as dividends to its shareholders.
35. What term represents a company’s history of consistently increasing its dividend payments to shareholders over time?
A. Dividend Stability
B. Dividend Sustainability
C. Dividend Growth
D. Dividend Coverage
Explanation: Dividend Growth refers to a company’s history of consistently increasing its dividend payments to shareholders over time.
36. What is the term for a special dividend payment made by a company, typically due to extraordinary profits or asset sales?
A. Regular Dividend
B. Bonus Dividend
C. Extra Dividend
D. Dividend Declaration
Explanation: An Extra Dividend is a special dividend payment made by a company, often due to extraordinary profits or asset sales.
37. What term describes a company’s ability to continue paying its dividends, often assessed through financial metrics like earnings and cash flow?
A. Dividend Yield
B. Dividend Stability
C. Dividend Coverage
D. Dividend Growth
Explanation: Dividend Coverage refers to a company’s ability to continue paying its dividends, often assessed through financial metrics like earnings and cash flow.
38. What term represents a company’s dividend payments expressed as a percentage of its earnings per share (EPS)?
A. Dividend Yield
B. Dividend Payout Ratio
C. Dividend Growth Rate
D. Dividend Coverage Ratio
Explanation: The Dividend Payout Ratio represents a company’s dividend payments as a percentage of its earnings per share (EPS).
39. What is the term for a date on which a company’s shareholders must own the stock in order to be eligible to receive the upcoming dividend payment?
A. Ex-Dividend Date
B. Record Date
C. Payable Date
D. Declaration Date
Explanation: The Record Date is the date on which shareholders must own the stock to be eligible for the upcoming dividend payment.
40. What term represents the date on which a company officially announces its intention to pay a dividend, along with the amount and date of payment?
A. Ex-Dividend Date
B. Record Date
C. Payable Date
D. Declaration Date
Explanation: The Declaration Date is when a company officially announces its intention to pay a dividend, including the amount and date of payment.
41. What valuation ratio measures a company’s stock price relative to its earnings per share (EPS) and is commonly used to assess whether a stock is overvalued or undervalued?
A. Price-to-Earnings Ratio (P/E Ratio)
B. Dividend Yield
C. Earnings Per Share (EPS) Ratio
D. Price-to-Book Ratio (P/B Ratio)
Explanation: The Price-to-Earnings (P/E) Ratio measures a company’s stock price relative to its earnings per share (EPS) and is commonly used for valuation.
42. What valuation ratio compares a company’s market capitalization to its total assets and is used to assess the company’s market value relative to its asset base?
A. Price-to-Earnings Ratio (P/E Ratio)
B. Price-to-Sales Ratio (P/S Ratio)
C. Price-to-Book Ratio (P/B Ratio)
D. Price-to-Cash Flow Ratio (P/CF Ratio)
Explanation: The Price-to-Book (P/B) Ratio compares a company’s market capitalization to its total assets, assessing market value relative to its asset base.
43. What term represents the valuation ratio that measures a company’s stock price relative to its revenue, providing insights into its market value relative to its sales?
A. Price-to-Earnings Ratio (P/E Ratio)
B. Price-to-Sales Ratio (P/S Ratio)
C. Price-to-Book Ratio (P/B Ratio)
D. Price-to-Cash Flow Ratio (P/CF Ratio)
Explanation: The Price-to-Sales (P/S) Ratio measures a company’s stock price relative to its revenue, indicating market value relative to sales.
44. What valuation ratio compares a company’s stock price to its operating cash flow per share and is used to assess its price relative to cash generation?
A. Price-to-Earnings Ratio (P/E Ratio)
B. Price-to-Sales Ratio (P/S Ratio)
C. Price-to-Book Ratio (P/B Ratio)
D. Price-to-Cash Flow Ratio (P/CF Ratio)
Explanation: The Price-to-Cash Flow (P/CF) Ratio compares a company’s stock price to its operating cash flow per share, assessing its price relative to cash generation.
45. What is the term for a valuation ratio that measures a company’s stock price relative to its book value per share and is used to evaluate its market value relative to its net assets?
A. Price-to-Earnings Ratio (P/E Ratio)
B. Price-to-Sales Ratio (P/S Ratio)
C. Price-to-Book Ratio (P/B Ratio)
D. Price-to-Cash Flow Ratio (P/CF Ratio)
Explanation: The Price-to-Book (P/B) Ratio measures a company’s stock price relative to its book value per share, assessing market value relative to net assets.
46. What valuation ratio measures a company’s stock price relative to its revenue and is used to assess whether a stock is overvalued or undervalued based on its sales?
A. Price-to-Earnings Ratio (P/E Ratio)
B. Price-to-Sales Ratio (P/S Ratio)
C. Price-to-Book Ratio (P/B Ratio)
D. Price-to-Cash Flow Ratio (P/CF Ratio)
Explanation: The Price-to-Sales (P/S) Ratio measures a company’s stock price relative to its revenue, evaluating its valuation based on sales.
47. What term represents a valuation ratio that measures a company’s stock price relative to its earnings before interest, taxes, depreciation, and amortization (EBITDA) and is used to assess its enterprise value?
A. Price-to-Earnings Ratio (P/E Ratio)
B. Price-to-Sales Ratio (P/S Ratio)
C. Price-to-EBITDA Ratio (P/EBITDA Ratio)
D. Price-to-Cash Flow Ratio (P/CF Ratio)
Explanation: The Price-to-EBITDA (P/EBITDA) Ratio measures a company’s stock price relative to its earnings before interest, taxes, depreciation, and amortization (EBITDA), assessing enterprise value.
48. What valuation ratio compares a company’s stock price to its revenue per share and is used to assess its market value relative to its sales per share?
A. Price-to-Earnings Ratio (P/E Ratio)
B. Price-to-Sales Ratio (P/S Ratio)
C. Price-to-Book Ratio (P/B Ratio)
D. Price-to-Earnings per Share (P/EPS) Ratio
Explanation: The Price-to-Earnings per Share (P/EPS) Ratio compares a company’s stock price to its revenue per share, evaluating market value relative to sales per share.
49. What term represents a valuation ratio that measures a company’s stock price relative to its cash flow from operating activities per share?
A. Price-to-Earnings Ratio (P/E Ratio)
B. Price-to-Sales Ratio (P/S Ratio)
C. Price-to-Operating Cash Flow per Share (P/OCFPS) Ratio
D. Price-to-Cash Flow Ratio (P/CF Ratio)
Explanation: The Price-to-Operating Cash Flow per Share (P/OCFPS) Ratio measures a company’s stock price relative to its cash flow from operating activities per share.
50. What term represents a valuation ratio that compares a company’s stock price to its earnings per share (EPS) and is commonly used to assess whether a stock is overvalued or undervalued?
A. Price-to-Earnings Ratio (P/E Ratio)
B. Dividend Yield
C. Earnings Per Share (EPS) Ratio
D. Price-to-Book Ratio (P/B Ratio)
Explanation: The Price-to-Earnings (P/E) Ratio measures a company’s stock price relative to its earnings per share (EPS) and is commonly used for valuation.
51. What term represents a company’s potential for future growth in earnings and stock price appreciation?
A. Dividend Yield
B. Market Capitalization
C. Growth Prospects
D. Price-to-Earnings Ratio (P/E Ratio)
Explanation: Growth Prospects refer to a company’s potential for future growth in earnings and stock price appreciation.
52. What is the term for the process of estimating a company’s future financial performance and evaluating its potential for growth?
A. Financial Analysis
B. Technical Analysis
C. Fundamental Analysis
D. Quantitative Analysis
Explanation: Fundamental Analysis involves estimating a company’s future financial performance and evaluating its potential for growth.
53. What term represents the rate at which a company’s earnings are expected to grow over a specific period, often expressed as a percentage?
A. Dividend Yield
B. Earnings Growth Rate
C. Market Capitalization
D. Price-to-Earnings Ratio (P/E Ratio)
Explanation: Earnings Growth Rate represents the rate at which a company’s earnings are expected to grow over a specific period, often expressed as a percentage.
54. What term represents a company’s ability to increase its earnings and revenues consistently over time, often considered a sign of strong growth prospects?
A. Earnings Stability
B. Earnings Consistency
C. Earnings Growth
D. Earnings Volatility
Explanation: Earnings Growth represents a company’s ability to increase its earnings and revenues consistently over time, indicating strong growth prospects.
55. What term refers to a company’s potential to capture a larger share of its market or expand into new markets, contributing to its growth?
A. Market Potential
B. Market Capitalization
C. Market Share
D. Market Expansion
Explanation: Market Share represents a company’s potential to capture a larger share of its market or expand into new markets, contributing to its growth.
56. What is the term for a financial metric that compares a company’s current stock price to its expected future earnings, often used to assess whether a stock is overvalued or undervalued based on growth expectations?
A. Price-to-Earnings Ratio (P/E Ratio)
B. Price-to-Sales Ratio (P/S Ratio)
C. Earnings Growth Rate
D. Forward P/E Ratio
Explanation: The Forward Price-to-Earnings (P/E) Ratio compares a company’s current stock price to its expected future earnings, assessing valuation based on growth expectations.
57. What term represents the estimated percentage increase in a company’s earnings for a specific period compared to the previous period?
A. Earnings Growth Rate
B. Dividend Yield
C. Market Capitalization
D. Price-to-Earnings Ratio (P/E Ratio)
Explanation: Earnings Growth Rate represents the estimated percentage increase in a company’s earnings for a specific period compared to the previous period.
58. What term represents a company’s potential to introduce new products or services, expand its customer base, or enter new markets, contributing to its growth?
A. Innovation
B. Diversification
C. Expansion
D. Stagnation
Explanation: Innovation represents a company’s potential to introduce new products or services, expand its customer base, or enter new markets, contributing to its growth.
59. What term represents a company’s ability to maintain or increase its market share in a highly competitive industry, indicating strong growth prospects?
A. Market Leadership
B. Market Capitalization
C. Market Volatility
D. Market Potential
Explanation: Market Leadership represents a company’s ability to maintain or increase its market share in a highly competitive industry, indicating strong growth prospects.
60. What is the term for a company’s potential to expand its operations globally, enter new international markets, and tap into international demand for its products or services?
A. Globalization
B. Localization
C. Internationalization
D. Market Expansion
Explanation: Internationalization represents a company’s potential to expand its operations globally, enter new international markets, and tap into international demand for its products or services.
61. What term refers to the process of evaluating the broader economic and market conditions that can impact a company’s performance and prospects?
A. Industry Analysis
B. Market Analysis
C. Macroeconomic Analysis
D. Microeconomic Analysis
Explanation: Macroeconomic Analysis involves evaluating broader economic and market conditions that can impact a company’s performance.
62. What is the term for the analysis that focuses on assessing the competitive forces within a specific industry, including the threat of new entrants, bargaining power of suppliers, and rivalry among existing competitors?
A. Industry Analysis
B. Market Analysis
C. Competitive Analysis
D. Economic Analysis
Explanation: Industry Analysis focuses on assessing competitive forces within a specific industry, including threats, supplier power, and rivalry among competitors.
63. What term represents the analysis of a company’s target market, customer demographics, and demand for its products or services?
A. Industry Analysis
B. Market Analysis
C. Competitive Analysis
D. Economic Analysis
Explanation: Market Analysis assesses a company’s target market, customer demographics, and demand for its products or services.
64. What term represents the analysis of a company’s direct competitors within its industry, including their strengths, weaknesses, and market position?
A. Industry Analysis
B. Market Analysis
C. Competitive Analysis
D. Economic Analysis
Explanation: Competitive Analysis focuses on a company’s direct competitors within its industry, evaluating their strengths, weaknesses, and market position.
65. What term refers to the study of the overall economic conditions, such as GDP growth, inflation rates, and interest rates, that can impact businesses and markets?
A. Industry Analysis
B. Market Analysis
C. Macroeconomic Analysis
D. Microeconomic Analysis
Explanation: Macroeconomic Analysis studies overall economic conditions, including GDP growth, inflation, and interest rates, that can impact businesses and markets.
66. What is the term for the analysis that evaluates a company’s suppliers, customers, and distribution channels, assessing their impact on the company’s operations and competitiveness?
A. Industry Analysis
B. Market Analysis
C. Stakeholder Analysis
D. Competitive Analysis
Explanation: Stakeholder Analysis evaluates a company’s suppliers, customers, and distribution channels, assessing their impact on the company’s operations and competitiveness.
67. What term represents the study of factors such as government regulations, taxation, and trade policies that can affect a company’s operations and profitability?
A. Industry Analysis
B. Market Analysis
C. Regulatory Analysis
D. Economic Analysis
Explanation: Regulatory Analysis studies factors like government regulations, taxation, and trade policies that can affect a company’s operations and profitability.
68. What term represents the analysis of a company’s suppliers and their ability to provide essential inputs, such as raw materials, at competitive prices and with reliability?
A. Supplier Analysis
B. Market Analysis
C. Supply Chain Analysis
D. Economic Analysis
Explanation: Supplier Analysis assesses a company’s suppliers and their ability to provide essential inputs at competitive prices and with reliability.
69. What term refers to the analysis of a company’s distribution channels, logistics, and transportation methods, which can impact its cost structure and efficiency?
A. Industry Analysis
B. Market Analysis
C. Distribution Analysis
D. Supply Chain Analysis
Explanation: Supply Chain Analysis evaluates a company’s distribution channels, logistics, and transportation methods, which can impact its cost structure and efficiency.
70. What is the term for the analysis of a company’s target market’s size, growth potential, and demographic trends, helping assess the demand for its products or services?
A. Industry Analysis
B. Market Analysis
C. Demographic Analysis
D. Economic Analysis
Explanation: Demographic Analysis assesses a company’s target market’s size, growth potential, and demographic trends, helping assess demand for its products or services.
71. What term refers to the individuals responsible for making strategic decisions and managing a company’s operations?
A. Shareholders
B. Board of Directors
C. Management Team
D. Corporate Officers
Explanation: The Management Team consists of individuals responsible for making strategic decisions and managing a company’s operations.
72. What is the term for the governing body of a corporation, responsible for overseeing the company’s management and representing shareholders’ interests?
A. Shareholders
B. Board of Directors
C. Management Team
D. Corporate Officers
Explanation: The Board of Directors is the governing body of a corporation, responsible for overseeing management and representing shareholders’ interests.
73. What term represents the top executive in a company, typically responsible for day-to-day operations and implementing the board’s strategic decisions?
A. Shareholders
B. CEO (Chief Executive Officer)
C. CFO (Chief Financial Officer)
D. CIO (Chief Information Officer)
Explanation: The CEO (Chief Executive Officer) is the top executive in a company, responsible for day-to-day operations and implementing the board’s strategic decisions.
74. What is the term for a company’s senior financial officer responsible for managing financial operations, reporting, and budgeting?
A. COO (Chief Operating Officer)
B. CIO (Chief Information Officer)
C. CFO (Chief Financial Officer)
D. CMO (Chief Marketing Officer)
Explanation: The CFO (Chief Financial Officer) is responsible for managing financial operations, reporting, and budgeting in a company.
75. What term represents the top technology executive responsible for managing a company’s technology and information systems?
A. CTO (Chief Technology Officer)
B. COO (Chief Operating Officer)
C. CIO (Chief Information Officer)
D. CEO (Chief Executive Officer)
Explanation: The CTO (Chief Technology Officer) is responsible for managing a company’s technology and information systems.
76. What is the term for a company’s top marketing executive responsible for developing and implementing marketing strategies and campaigns?
A. CTO (Chief Technology Officer)
B. CMO (Chief Marketing Officer)
C. CIO (Chief Information Officer)
D. CEO (Chief Executive Officer)
Explanation: The CMO (Chief Marketing Officer) is responsible for developing and implementing marketing strategies and campaigns.
77. What term represents the process of evaluating a company’s management team’s qualifications, experience, and track record?
A. Management Assessment
B. Corporate Governance
C. Leadership Evaluation
D. Executive Analysis
Explanation: Management Assessment involves evaluating a company’s management team’s qualifications, experience, and track record.
78. What is the term for the set of rules, practices, and processes by which a company is directed and controlled, including its relationships with shareholders and stakeholders?
A. Management Assessment
B. Corporate Governance
C. Leadership Evaluation
D. Executive Analysis
Explanation: Corporate Governance comprises the rules, practices, and processes by which a company is directed and controlled.
79. What term represents the evaluation of a company’s board of directors’ independence, diversity, and effectiveness in representing shareholders’ interests?
A. Board Assessment
B. Governance Analysis
C. Leadership Evaluation
D. Director Evaluation
Explanation: Board Assessment involves evaluating a company’s board of directors’ independence, diversity, and effectiveness in representing shareholders’ interests.
80. What is the term for a company’s top operating executive responsible for managing day-to-day operations and implementing strategic decisions?
A. CEO (Chief Executive Officer)
B. CFO (Chief Financial Officer)
C. COO (Chief Operating Officer)
D. CIO (Chief Information Officer)
Explanation: The COO (Chief Operating Officer) is responsible for managing day-to-day operations and implementing strategic decisions in a company.
81. What term refers to the overall health and performance of a country’s economy, including factors like GDP growth, inflation, and unemployment?
A. Microeconomic Factors
B. Macroeconomic Factors
C. Industry Analysis
D. Market Analysis
Explanation: Macroeconomic Factors refer to the overall health and performance of a country’s economy, including GDP, inflation, and unemployment.
82. What is the term for the percentage increase in the prices of goods and services over time, which can erode the purchasing power of currency and impact investment decisions?
A. Inflation
B. Deflation
C. Interest Rate
D. Gross Domestic Product (GDP)
Explanation: Inflation represents the percentage increase in the prices of goods and services over time.
83. What term represents the total value of goods and services produced within a country’s borders over a specific period, often used as a key economic indicator?
A. GDP (Gross Domestic Product)
B. CPI (Consumer Price Index)
C. P/E Ratio (Price-to-Earnings Ratio)
D. Trade Balance
Explanation: GDP (Gross Domestic Product) represents the total value of goods and services produced within a country’s borders over a specific period.
84. What term refers to the measure of a country’s economic output per capita, dividing the GDP by its population, indicating the standard of living and economic well-being of its citizens?
A. GDP (Gross Domestic Product)
B. Inflation Rate
C. Per Capita GDP
D. Trade Balance
Explanation: Per Capita GDP measures a country’s economic output per capita, indicating the standard of living of its citizens.
85. What term represents the percentage of the total labor force that is unemployed and actively seeking employment, often used as an economic indicator?
A. GDP (Gross Domestic Product)
B. Inflation Rate
C. Unemployment Rate
D. Interest Rate
Explanation: The Unemployment Rate represents the percentage of the total labor force that is unemployed and actively seeking employment.
86. What is the term for the government’s fiscal policy tool that involves increasing public spending and reducing taxes to stimulate economic growth during a recession?
A. Austerity Measures
B. Monetary Policy
C. Expansionary Fiscal Policy
D. Contractionary Fiscal Policy
Explanation: Expansionary Fiscal Policy involves increasing public spending and reducing taxes to stimulate economic growth during a recession.
87. What term represents the government’s monetary policy tool that involves adjusting the supply of money and interest rates to influence economic activity?
A. Fiscal Policy
B. Inflation Rate
C. Monetary Policy
D. Unemployment Rate
Explanation: Monetary Policy involves adjusting the supply of money and interest rates to influence economic activity.
88. What term refers to the balance between a country’s exports (goods and services sold to other countries) and imports (goods and services purchased from other countries)?
A. GDP (Gross Domestic Product)
B. Trade Balance
C. Inflation Rate
D. Unemployment Rate
Explanation: Trade Balance represents the balance between a country’s exports and imports.
89. What term represents the overall level of economic activity within a country, often measured by GDP and other indicators?
A. Economic Growth
B. Fiscal Policy
C. Monetary Policy
D. Business Cycle
Explanation: Economic Growth represents the overall level of economic activity within a country.
90. What term refers to the government’s fiscal policy tool that involves reducing public spending and increasing taxes to slow down economic growth and control inflation?
A. Expansionary Fiscal Policy
B. Monetary Policy
C. Austerity Measures
D. Contractionary Fiscal Policy
Explanation: Contractionary Fiscal Policy involves reducing public spending and increasing taxes to control inflation and slow down economic growth.
91. What term represents the body of laws and regulations that govern financial markets and protect investors?
A. Regulatory Framework
B. Legal Code
C. Corporate Governance
D. Market Analysis
Explanation: The Regulatory Framework comprises laws and regulations that govern financial markets and protect investors.
92. What is the term for the legal document that a company must file with regulatory authorities, providing detailed information about its financial performance, operations, and risks?
A. Annual Report
B. Prospectus
C. Proxy Statement
D. Income Statement
Explanation: A Prospectus is a legal document that a company must file, providing detailed information about its financial performance, operations, and risks.
93. What term represents the process of reviewing a company’s financial statements and disclosures to ensure compliance with accounting standards and regulations?
A. Financial Analysis
B. Auditing
C. Risk Assessment
D. Compliance Review
Explanation: Auditing involves reviewing a company’s financial statements and disclosures to ensure compliance with accounting standards and regulations.
94. What term refers to the process of assessing a company’s adherence to laws and regulations, as well as its ethical standards and corporate governance practices?
A. Risk Assessment
B. Compliance Review
C. Regulatory Analysis
D. Financial Analysis
Explanation: Compliance Review assesses a company’s adherence to laws, regulations, ethical standards, and corporate governance practices.
95. What term represents the legal obligation of a company’s management to provide accurate and transparent financial information to investors and regulators?
A. Fiduciary Duty
B. Due Diligence
C. Compliance Obligation
D. Regulatory Requirement
Explanation: Fiduciary Duty is the legal obligation of a company’s management to provide accurate and transparent financial information.
96. What is the term for a company’s legal obligation to disclose all material information to investors and the public in a timely and fair manner?
A. Due Diligence
B. Material Disclosure
C. Regulatory Requirement
D. Transparency Obligation
Explanation: Material Disclosure is a company’s legal obligation to disclose all material information to investors and the public in a timely and fair manner.
97. What term represents the process of evaluating a company’s compliance with environmental, social, and governance (ESG) criteria and its impact on business performance?
A. ESG Analysis
B. Regulatory Review
C. Compliance Assessment
D. Ethical Evaluation
Explanation: ESG Analysis evaluates a company’s compliance with environmental, social, and governance (ESG) criteria and its impact on business performance.
98. What term refers to the legal structure that separates a company from its owners, providing limited liability to shareholders and allowing the company to raise capital by issuing stock?
A. Sole Proprietorship
B. Partnership
C. Corporation
D. LLC (Limited Liability Company)
Explanation: A Corporation is a legal structure that separates a company from its owners, offering limited liability to shareholders and the ability to raise capital through stock issuance.
99. What term represents the legal requirement for a company to hold regular meetings with shareholders and provide them with important information about the company’s performance and governance?
A. Proxy Statement
B. Shareholder Engagement
C. Regulatory Compliance
D. Corporate Governance
Explanation: Shareholder Engagement is the legal requirement for a company to hold regular meetings with shareholders and provide them with important information.
100. What is the term for a legal document that allows shareholders to vote on important matters, such as the election of directors and approval of major corporate transactions?
A. Annual Report
B. Proxy Statement
C. Prospectus
D. Bylaws
Explanation: A Proxy Statement is a legal document that allows shareholders to vote on important matters, including the election of directors and approval of major corporate transactions.
101. What term represents a company’s ability to differentiate its products or services from those of competitors, giving it a competitive advantage?
A. Competitive Advantage
B. Market Share
C. Price-to-Earnings Ratio (P/E Ratio)
D. Dividend Yield
Explanation: Competitive Advantage refers to a company’s ability to differentiate its products or services from competitors, providing an edge.
102. What is the term for the strategy that focuses on becoming the lowest-cost producer in an industry, often achieved through cost efficiencies and economies of scale?
A. Cost Leadership
B. Differentiation
C. Niche Marketing
D. Market Segmentation
Explanation: Cost Leadership is the strategy of becoming the lowest-cost producer through efficiencies and scale.
103. What term represents the company’s share of the total market for a specific product or service, indicating its competitive position?
A. Competitive Advantage
B. Market Share
C. Price-to-Earnings Ratio (P/E Ratio)
D. Dividend Yield
Explanation: Market Share represents a company’s share of the total market for a specific product or service, indicating its competitive position.
104. What term refers to the approach of targeting a specific, well-defined segment of the market and tailoring products or services to meet the unique needs of that segment?
A. Cost Leadership
B. Differentiation
C. Niche Marketing
D. Market Segmentation
Explanation: Niche Marketing targets specific market segments with tailored products or services.
105. What term represents the strategy of offering products or services that are unique and distinct from those of competitors, often commanding premium prices?
A. Cost Leadership
B. Differentiation
C. Niche Marketing
D. Market Segmentation
Explanation: Differentiation involves offering unique products or services that command premium prices.
106. What is the term for the process of dividing a market into distinct groups based on specific characteristics, needs, or behaviors of customers?
A. Cost Leadership
B. Market Analysis
C. Market Segmentation
D. Competitive Positioning
Explanation: Market Segmentation divides a market into distinct groups based on customer characteristics, needs, or behaviors.
107. What term represents the measure of a company’s profitability relative to its competitors, often expressed as a ratio or percentage?
A. Competitive Advantage
B. Market Share
C. Profit Margin
D. Dividend Yield
Explanation: Profit Margin is a measure of a company’s profitability relative to competitors.
108. What term refers to a company’s strategy of offering a variety of products or services to serve different customer segments within the same market?
A. Cost Leadership
B. Differentiation
C. Diversification
D. Market Expansion
Explanation: Diversification involves offering a variety of products or services to serve different customer segments within the same market.
109. What term represents the process of evaluating a company’s strengths and weaknesses relative to competitors and market conditions?
A. SWOT Analysis
B. Market Share Analysis
C. Competitive Positioning
D. Risk Assessment
Explanation: SWOT Analysis evaluates a company’s strengths and weaknesses relative to competitors and market conditions.
110. What is the term for the analysis that assesses a company’s competitive position by comparing its financial performance and ratios to those of its industry peers?
A. Industry Analysis
B. Peer Comparison
C. Market Segmentation
D. Competitive Advantage
Explanation: Peer Comparison assesses a company’s competitive position by comparing its financial performance to industry peers.
111. What term represents non-financial factors that can impact a company’s performance, such as its brand reputation, customer loyalty, and corporate culture?
A. Quantitative Metrics
B. Qualitative Factors
C. Financial Ratios
D. Market Analysis
Explanation: Qualitative Factors are non-financial factors like brand reputation and corporate culture that can impact a company’s performance.
112. What is the term for the measure of how customers perceive a company’s products or services, often reflected in customer satisfaction surveys and reviews?
A. Brand Recognition
B. Market Share
C. Customer Perception
D. Customer Satisfaction
Explanation: Customer Satisfaction measures how customers perceive a company’s products or services.
113. What term represents the reputation and recognition a company’s brand has among consumers and in the market?
A. Brand Perception
B. Market Share
C. Brand Equity
D. Customer Satisfaction
Explanation: Brand Equity represents the reputation and recognition a company’s brand has among consumers and in the market.
114. What term refers to a company’s ability to adapt to changing market conditions, technological advancements, and competitive challenges, often related to innovation and flexibility?
A. Market Leadership
B. Competitive Positioning
C. Adaptability
D. Resilience
Explanation: Resilience is a company’s ability to adapt to changing market conditions and challenges.
115. What term represents the values, beliefs, and principles that guide a company’s behavior and decision-making, often reflected in its corporate culture?
A. Ethical Standards
B. Cultural Values
C. Corporate Governance
D. Code of Conduct
Explanation: Cultural Values are the values, beliefs, and principles that guide a company’s behavior and decision-making.
116. What is the term for a company’s commitment to ethical behavior and responsible business practices, often reflected in its policies and actions related to sustainability and social responsibility?
A. Corporate Citizenship
B. Ethical Standards
C. Environmental Stewardship
D. Corporate Governance
Explanation: Corporate Citizenship reflects a company’s commitment to ethical behavior and responsible business practices.
117. What term represents the potential impact of external factors, such as political instability, regulatory changes, and natural disasters, on a company’s operations and profitability?
A. Economic Factors
B. Market Conditions
C. Risk Assessment
D. External Risks
Explanation: External Risks represent the potential impact of external factors on a company’s operations and profitability.
118. What term refers to a company’s ability to attract and retain skilled and talented employees, often linked to its workplace culture and human resource practices?
A. Employee Engagement
B. Talent Management
C. Workforce Diversity
D. Compensation Structure
Explanation: Talent Management is a company’s ability to attract and retain skilled employees.
119. What term represents the potential impact of cultural, political, and legal differences when a company operates in multiple countries or regions?
A. Global Expansion
B. Cross-Cultural Risk
C. Market Diversification
D. Trade Barriers
Explanation: Cross-Cultural Risk represents the potential impact of cultural, political, and legal differences when a company operates internationally.
120. What is the term for the analysis that assesses a company’s non-financial factors, such as corporate culture, social responsibility, and brand reputation, to understand its qualitative strengths and weaknesses?
A. Qualitative Evaluation
B. SWOT Analysis
C. Ethical Assessment
D. Sustainability Analysis
Explanation: Qualitative Evaluation assesses a company’s non-financial factors to understand its qualitative strengths and weaknesses.
121. What term represents the financial metric that indicates a company’s profitability by dividing net income by shareholders’ equity?
A. Price-to-Earnings Ratio (P/E Ratio)
B. Return on Equity (ROE)
C. Debt-to-Equity Ratio
D. Current Ratio
Explanation: Return on Equity (ROE) measures a company’s profitability by dividing net income by shareholders’ equity.
122. What is the term for the financial metric that shows a company’s ability to pay its short-term obligations, calculated by dividing current assets by current liabilities?
A. Quick Ratio
B. Debt Ratio
C. Current Ratio
D. Cash Ratio
Explanation: The Current Ratio measures a company’s ability to pay short-term obligations by dividing current assets by current liabilities.
123. What term represents the financial metric that indicates the proportion of a company’s earnings paid out as dividends to shareholders, calculated as dividends per share divided by earnings per share?
A. Dividend Yield
B. Price-to-Earnings Ratio (P/E Ratio)
C. Dividend Payout Ratio
D. Earnings Per Share (EPS)
Explanation: The Dividend Payout Ratio indicates the proportion of earnings paid out as dividends, calculated as dividends per share divided by earnings per share.
124. What term refers to the financial metric that measures a company’s efficiency in managing its assets, calculated as net income divided by total assets?
A. Debt-to-Equity Ratio
B. Asset Turnover Ratio
C. Return on Assets (ROA)
D. Quick Ratio
Explanation: Return on Assets (ROA) measures a company’s efficiency in managing its assets, calculated as net income divided by total assets.
125. What term represents the financial metric that shows the percentage of a company’s earnings paid out as dividends to shareholders, calculated as dividends per share divided by earnings per share, multiplied by 100?
A. Dividend Payout Ratio
B. Dividend Yield
C. Price-to-Earnings Ratio (P/E Ratio)
D. Earnings Per Share (EPS)
Explanation: Dividend Yield shows the percentage of earnings paid out as dividends, calculated as dividends per share divided by earnings per share, multiplied by 100.
126. What is the term for the financial metric that evaluates a company’s ability to generate profits from its operating activities, calculated as operating income divided by revenue?
A. Debt Ratio
B. Profit Margin
C. Operating Ratio
D. Earnings Per Share (EPS)
Explanation: Profit Margin evaluates a company’s ability to generate profits from its operating activities, calculated as operating income divided by revenue.
127. What term represents the financial metric that shows the proportion of a company’s assets financed by debt, calculated as total debt divided by total assets?
A. Debt-to-Equity Ratio
B. Debt Ratio
C. Current Ratio
D. Asset Turnover Ratio
Explanation: The Debt Ratio shows the proportion of a company’s assets financed by debt, calculated as total debt divided by total assets.
128. What term refers to the financial metric that evaluates a company’s ability to meet its short-term obligations using its most liquid assets, calculated as current assets minus inventory divided by current liabilities?
A. Quick Ratio
B. Debt Ratio
C. Current Ratio
D. Cash Ratio
Explanation: The Quick Ratio evaluates a company’s ability to meet short-term obligations with liquid assets, calculated as current assets minus inventory divided by current liabilities.
129. What term represents the financial metric that shows the proportion of a company’s earnings paid out as dividends to shareholders, calculated as dividends per share divided by earnings per share, multiplied by 100?
A. Dividend Payout Ratio
B. Dividend Yield
C. Price-to-Earnings Ratio (P/E Ratio)
D. Earnings Per Share (EPS)
Explanation: Dividend Yield shows the percentage of earnings paid out as dividends, calculated as dividends per share divided by earnings per share, multiplied by 100.
130. What is the term for the financial metric that measures the proportion of a company’s total assets that are financed by shareholders’ equity, calculated as shareholders’ equity divided by total assets?
A. Debt Ratio
B. Return on Equity (ROE)
C. Debt-to-Equity Ratio
D. Asset Turnover Ratio
Explanation: Return on Equity (ROE) measures the proportion of assets financed by shareholders’ equity, calculated as shareholders’ equity divided by total assets.
131. What is the primary objective of Fundamental Analysis in the context of the stock market?
A. To predict short-term price fluctuations
B. To identify potential insider trading
C. To assess a company’s intrinsic value
D. To analyze technical indicators
Explanation: The primary objective of Fundamental Analysis is to assess a company’s intrinsic value.
132. Which financial statement provides a snapshot of a company’s financial position at a specific point in time, including its assets, liabilities, and shareholders’ equity?
A. Income Statement
B. Cash Flow Statement
C. Balance Sheet
D. Statement of Retained Earnings
Explanation: The Balance Sheet provides a snapshot of a company’s financial position at a specific point in time.
133. What term refers to the earnings generated by a company from its core operating activities, excluding any income from non-operating sources?
A. Gross Profit
B. Net Income
C. Operating Income
D. Earnings Before Interest and Taxes (EBIT)
Explanation: Operating Income represents earnings generated from core operating activities.
134. Which financial statement summarizes a company’s revenues, expenses, and net profit or loss over a specific period, typically a fiscal quarter or year?
A. Balance Sheet
B. Cash Flow Statement
C. Income Statement
D. Statement of Changes in Equity
Explanation: The Income Statement summarizes a company’s revenues, expenses, and net profit or loss over a specific period.
135. What term represents the difference between a company’s total revenue and its total expenses, indicating whether the company made a profit or incurred a loss?
A. Gross Profit
B. Net Income
C. Operating Income
D. Earnings Before Interest and Taxes (EBIT)
Explanation: Net Income is the difference between total revenue and total expenses, indicating whether a company made a profit or incurred a loss.
136. What is the term for the analysis that involves comparing a company’s financial performance to industry averages and benchmarks to assess its relative strength and weaknesses?
A. Peer Analysis
B. SWOT Analysis
C. Ratio Analysis
D. Trend Analysis
Explanation: Peer Analysis compares a company’s financial performance to industry averages and benchmarks.
137. Which of the following financial ratios measures a company’s ability to cover its short-term liabilities with its short-term assets?
A. Debt Ratio
B. Quick Ratio
C. Return on Equity (ROE)
D. Price-to-Earnings Ratio (P/E Ratio)
Explanation: The Quick Ratio measures a company’s ability to cover short-term liabilities with short-term assets.
138. What is the term for the rate at which a company’s share price rises over time, often used to assess the historical performance of a stock?
A. Dividend Yield
B. Earnings Per Share (EPS)
C. Price-to-Earnings Ratio (P/E Ratio)
D. Total Return
Explanation: Total Return represents the rate at which a company’s share price rises over time.
139. What term represents the market value of a company’s outstanding shares of stock, calculated by multiplying the stock’s current market price by the number of shares?
A. Market Capitalization
B. Enterprise Value
C. Book Value
D. Equity Value
Explanation: Market Capitalization represents the market value of a company’s outstanding shares of stock.
140. What is the term for the financial metric that measures a company’s ability to generate earnings from its invested capital, calculated as net income divided by total capital employed?
A. Return on Assets (ROA)
B. Return on Investment (ROI)
C. Return on Equity (ROE)
D. Earnings Per Share (EPS)
Explanation: Return on Investment (ROI) measures a company’s ability to generate earnings from invested capital.
141. What is the term for a company’s long-term debt, including bonds and loans, as a percentage of its total capitalization?
A. Debt Ratio
B. Debt-to-Equity Ratio
C. Current Ratio
D. Quick Ratio
Explanation: Debt-to-Equity Ratio represents a company’s long-term debt as a percentage of its total capitalization.
142. Which of the following financial ratios measures a company’s ability to efficiently manage its inventory by dividing the cost of goods sold by the average inventory value?
A. Inventory Turnover Ratio
B. Return on Assets (ROA)
C. Quick Ratio
D. Gross Margin Ratio
Explanation: The Inventory Turnover Ratio measures a company’s ability to manage inventory efficiently.
143. What term represents the market value of a company’s total outstanding shares of stock, calculated by multiplying the stock’s current market price by the number of shares, minus any liabilities?
A. Market Capitalization
B. Enterprise Value
C. Equity Value
D. Book Value
Explanation: Equity Value is the market value of outstanding shares minus liabilities.
144. What is the term for the financial metric that measures a company’s profitability by dividing its gross profit by revenue?
A. Operating Income
B. Net Income
C. Gross Margin Ratio
D. Earnings Before Interest and Taxes (EBIT)
Explanation: Gross Margin Ratio measures profitability by dividing gross profit by revenue.
145. Which financial statement provides a summary of a company’s changes in equity over a specific period, including contributions from shareholders and distributions to shareholders such as dividends?
A. Income Statement
B. Cash Flow Statement
C. Statement of Changes in Equity
D. Balance Sheet
Explanation: The Statement of Changes in Equity summarizes changes in a company’s equity over a specific period.
146. What is the term for the financial metric that measures a company’s ability to pay its long-term debt, calculated as earnings before interest and taxes (EBIT) divided by interest expenses?
A. Debt Coverage Ratio
B. Current Ratio
C. Dividend Payout Ratio
D. Operating Margin
Explanation: Debt Coverage Ratio measures a company’s ability to pay long-term debt with EBIT.
147. What term represents the analysis of a company’s financial statements and ratios to determine its investment potential and intrinsic value?
A. Market Analysis
B. Technical Analysis
C. Financial Statement Analysis
D. Fundamental Analysis
Explanation: Fundamental Analysis involves analyzing financial statements and ratios to assess investment potential and intrinsic value.
148. What is the term for the financial metric that measures a company’s efficiency in converting its sales or revenue into actual cash, calculated as operating cash flow divided by revenue?
A. Cash Conversion Cycle
B. Operating Margin
C. Cash Flow Ratio
D. Accounts Receivable Turnover
Explanation: The Cash Flow Ratio measures a company’s efficiency in converting revenue into cash.
149. Which financial statement provides a detailed account of a company’s cash inflows and outflows from its operating, investing, and financing activities over a specific period?
A. Balance Sheet
B. Income Statement
C. Cash Flow Statement
D. Statement of Changes in Equity
Explanation: The Cash Flow Statement details a company’s cash flows from operating, investing, and financing activities.
150. What is the term for the financial metric that measures a company’s ability to cover its interest expenses with its earnings, calculated as earnings before interest and taxes (EBIT) divided by interest expenses?
A. Debt Service Coverage Ratio
B. Return on Equity (ROE)
C. Operating Margin
D. Gross Margin Ratio
Explanation: Debt Service Coverage Ratio measures a company’s ability to cover interest expenses with EBIT.
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