1. A balance sheet reports the value of a firm’s assets, liabilities, and equity  at any point in time
2. A company purchases a new $10 million building financed half with cash and half with a bank loan. How would this transaction affect the company’s balance sheet?   Net plant and equipment rises $10 million; cash falls $5 million; bank debt rises $5 million.
3. A company sells used equipment with a book value of $100,000 for $250,000 cash. How would this transaction affect the company’s balance sheet?   Cash rises $250,000; net plant and equipment falls $100,000; equity rises $150,000
4. Cross Corporation has Net Income of $4,095. Their retention ratio is 65%. How much will they payout in dividends this year?  $1,433
5. Depreciation expense   decreases both taxes and net income
6. For the Sales Forecast, almost all financial plans require an internally supplied sales forecast.   False
7. Garner Corporation has total liabilities of $1,750 and equity of $4,450. Sales are $3,300. What is the Capital Intensity Ratio for Garner Corporation?     1.88
8. Growth can summarize various aspects of a firm’s _________ and _________ policies.   Financial, investment
9. Please refer to Oscar’s financial statements above. All of Oscar’s costs and current asset accounts vary directly with sales. Sales are projected to increase by 10% next year. What is the pro forma accounts receivable balance for next year  $1,034
10. Please refer to Oscar’s financial statements above. Assume a constant profit margin and dividend payout ratio, and further assume all of Oscar’s assets and current liabilities vary directly with sales. Assume long-term debt and common stock remain unchanged. Sales are projected to increase by 10% next year. What is Oscar’s external financing need for next year?   − $260
11. Please refer to Oscar’s financial statements above. What was Oscar’s increase in retained earnings during 2021?   $1,380
12. Please refer to the financial information for Foodtek, Incorporation above. During 2021, how much cash (in millions of dollars) did Foodtek collect from sales?  324
13. The book value of an asset  could be greater than, equal to, or less than its market value.
14. The most common approach to developing pro forma financial statements is called the  percent-of-sales method.
15. The sources and uses of cash over a stated period of time are reflected in the   cash flow statement
16. To generate a coherent plan, goals and objectives will have to be modified, and priorities will have to be established.  True
17. When evaluating financial planning steps, we must consider all of the following, except:  The project horizon for the next 30 to 90 days.
18. Which of the following are viable techniques to cope with the uncertainty inherent in realistic financial projections?   Simulation
     Scenario Analysis
    Sensitivity Analysis only
19. Which of the following is a reason why a company’s market value of equity can differ from its book value of equity?   The value of some assets on the balance sheet reflect historical cost, adjusted for depreciation.
20. Which of the following is NOT a major category on the cash flow statement?   Cash flows from selling activities
21. Which of the following is NOT a typical reason for differences between profits and cash flow?   Goodwill
22. Which of the following statements concerning a firm’s cash flows and profits is false?  A company that sells merchandise at a profit will generate cash soon enough to replenish cash flows required for continued production.
23. Which of the following statements is correct if a firm’s pro forma financial statements project net income of $12,000 and external financing required of $5,000?  Retained earnings cannot grow by more than $12,000.
24. Which of the following would NOT be considered a use of cash?   Depreciation
25. Which one of the following is a source of cash?   decrease in accounts receivable
26. Which one of the following is a source of cash?   increase in accounts payable
27. Which one of the following is a use of cash?  increase in inventory
28. Which one of the following is the financial statement that shows a financial snapshot, taken at a point in time, of all the assets the company owns and all the claims against those assets?   balance sheet
29. Which one of the following is the financial statement that summarizes a firm’s revenue and expenses over a period of time?    Income statement
30. Which one of the following is the financial statement that summarizes changes in the company’s cash balance over a period of time?  cash flow statement
31. You are estimating your company’s external financing needs for the next year. At the end of next year, you project that owners’ equity will be $80 million, total assets will be $170 million, and total liabilities will be $60 million. How much external funding required will be projected for your company at the end of next year?   $30 million

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