Skip to ContentGo to accessibility pageKeyboard shortcuts menu
OpenStax Logo
Principles of Finance

Review Questions

Principles of FinanceReview Questions
1 .
What is the difference between gross profit and net income?
2 .
If a classified balance sheet has total assets of $900,000 and total owner’s equity of $350,000, what must the company’s total liabilities be?
3 .
What key element of the income statement flows through to the balance sheet?
4 .
What key columns are commonly found on the statement of owner’s equity?
5 .
Ted’s firm reported net income for the current period of $65,750. Is it safe to assume that because Ted’s firm reported such a large net income, it has plenty of cash to fund its operations? Why or why not?
6 .
What useful insights does free cash flow (FCF) provide in financial analysis?
7 .
Describe how common-size statements are useful.
8 .
What is the difference between a calendar year and a fiscal year?
PreviousNext
Order a print copy
Citation/Attribution

This book may not be used in the training of large language models or otherwise be ingested into large language models or generative AI offerings without OpenStax's permission.

Want to cite, share, or modify this book? This book uses the Creative Commons Attribution License and you must attribute OpenStax.

Attribution information
  • If you are redistributing all or part of this book in a print format, then you must include on every physical page the following attribution:
    Access for free at https://openstax.org/books/principles-finance/pages/1-why-it-matters
  • If you are redistributing all or part of this book in a digital format, then you must include on every digital page view the following attribution:
    Access for free at https://openstax.org/books/principles-finance/pages/1-why-it-matters
Citation information

© Jan 8, 2024 OpenStax. Textbook content produced by OpenStax is licensed under a Creative Commons Attribution License . The OpenStax name, OpenStax logo, OpenStax book covers, OpenStax CNX name, and OpenStax CNX logo are not subject to the Creative Commons license and may not be reproduced without the prior and express written consent of Rice University.