Compound

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Compound Prosper

• GEK2507

Frederick H. Willeboordse frederik_at_chaos.nus.edu.s
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Exercises for Test 1
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Important note The sample questions provided
here are for your reference only. The questions
asked during the test will be similar in style
but can be very different otherwise.The
questions cover the materials presented in
Lectures 1 to 5 and lab sessions 1 to 3.
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Examples of MC questions
What does a Balance sheet balance A) Owners
Equity and Assets B) Owners Equity and
Liabilities C) Assets and Liabilities D) Assets
and Depreciation
Depreciation is similar to A)
Amortization B) Owners Equity C) Interest D)
Profit
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A A1 in an Excel formula means A) An
absolute reference to cell A1 B) A relative
reference to cell A1 C) The number in A1 refers
to money D) Nothing this syntax is invalid
The quick ratio is A) A quick way to
calculate a companies profit B) Not really a
ratio but a shortcut C) Multiplied by the
current liabilities equal to Current Assets
minus inventories D) Current Liabilities minus
Inventory divided by Current Assets
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The T in EBITDA stands for A) Total
Assets B) Transaction C) Taxes D) Treasury
Gross Profit Equals A) Sales minus cost of
Sales B) Net Profit C) The 144 profit
method D) EBITDA
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Examples of short questions
What is Golden Dragons Cost of Sales?
?
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• True or false Owners Equity is an asset.
• I set up a (wholly owned) company with 20,000 in
  cash. Since then, I made a profit of 562 and
  paid out 400 in dividends. What are the retained
  earnings?
• Is it possible to find the Net Cash Flow (which
  is the sum of the cash flows in the Cash Flow
  Statement) from the Balance Sheet(s) of a
  company.
• True or False Dividends do not appear on the
  Income Statement and hence not on the Cash Flow
  Statement either.

?
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• What is Aunt Petunias Gross Profit Margin?

• A company has sales of 300,000 and a gross
  margin of 38. What should be the (average)
  inventory level so that the company has an
  inventory turnover ratio of 8?

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• A company has sales of 123,000. Its cost of
  sales is 52. The company pays 1,800 in rent a
  month and has two employees earning 1,200 and
  1,500 a month respectively. The company is
  fairly cash rich having 391,000 in a savings
  account earning 1.5 interest a year. This
  company doesnt do much and its other expenses
  are only 240 a year. Assuming that there are no
  other relevant financial data for this company,
• What is the Gross Profit of this company?
• What is the Net Profit of this company?

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• We have a company which has been and is growing
  sales at 5 per month. 33 of the sales are paid
  during the month following the sale. Except for
  3 unrecoverables, the remainder is paid during
  the second month after the sale. Manpower and
  other costs are 21 of sales and inventory
  purchases are 39 of the following months sales.
  Assume that the company has sales of 9,901 in
  April. There are no investing activities and the
  company is assumed to have an unlimited 0 credit
  line.
• What is the net cash flow in the month of May if
  1000 of dividends were paid in April?
• What is the ending Cash balance in May if the
  starting cash balance is 2980 in the beginning
  of April?