Questions from Managerial Finance

Q: What is the difference between cross-sectional and time-series

What is the difference between cross-sectional and time-series ratio analysis? What is benchmarking?

Q: When performing cross-sectional ratio analysis, the analyst should pay

When performing cross-sectional ratio analysis, the analyst should pay primary attention to what types of deviations from the norm? Why?

Q: Why is it preferable to compare ratios calculated using financial statements that

Why is it preferable to compare ratios calculated using financial statements that are dated at the same point in time during the year?

Q: Under what circumstances would the current ratio be the preferred measure of

Under what circumstances would the current ratio be the preferred measure of overall firm liquidity? Under what circumstances would the quick ratio be preferred?

Q: What is the financial planning process? Contrast long-term (

What is the financial planning process? Contrast long-term (strategic) financial plans with short-term (operating) financial plans.

Q: What is the purpose of the cash budget? What role does

What is the purpose of the cash budget? What role does the sales forecast play in its preparation?

Q: Briefly describe the basic format of the cash budget.

Briefly describe the basic format of the cash budget.

Q: How can the two “bottom lines” of the cash budget

How can the two “bottom lines” of the cash budget be used to determine the firm’s short-term borrowing and investment requirements?

Q: What is the purpose of pro forma statements? What inputs are

What is the purpose of pro forma statements? What inputs are required for preparing them using the simplified approaches?

Q: You are a summer intern at the office of a local tax

You are a summer intern at the office of a local tax preparer. To test your basic knowledge of financial statements, your manager gives you the following list of accounts and asks you to prepare a sim...