Which statement best describes the statement of cash flows? a) The statement of cash flows reports the names of the companys bank accounts and the balance by bank. b) The statement of cash flows reports the debt agreements that will be paid in the next five years. c) The statement of cash flows reports components of cash flows by activities that reconciles to cash balances in the balance sheet.

2.Which statement best describes cash flow from (for) operating activities determined under the indirect method in the statement of cash flows? a) Cash flow from (for) operating activities is equal to net income (loss) reported. b) Cash flow from (for) operating activities is determined by taking net income(loss) reported and converting, or reconciling it, to a cash basis. c) Cash flow from (for) operating activities is determined by taking net income(loss) reported minus capital expenditures and other investing activities.

3.Cash expenditures for plant property and equipment (Capital Expenditures) are included in what activities section of the statement of cash flows? a) Operating b) Financing c) Investing

4.Cash activity for debt borrowings and/or repayments are included in what activities section of the statement of cash flows? a) Operating b) Financing c) Investing

5.The first step in a financial analysis project is to: a) Perform a search of the company on the internet b) Establish the objective(s) c) Research filings with the SEC

6.Which statement best describes the term pro forma in financial analysis? a) Pro forma are specialized forecasts required by the SEC that are usually associated with issuance of stock and bonds. b) Pro forma are the annual budgets of companies c) Pro forma are historical results for the past three years.

7.If Company A is expected to experience significantly higher earnings growth compared to Company B, what would be the likely impact on the Price-Earnings Ratio (PE Ratio) of Company As common stock price compared to Company Bs common stock? a) Company A would have a higher PE Ratio compared to Company B b) Company A would have a lower PE Ratio compared to Company B c) No impact

8.Which statement best describes the stock price of a company with a high a Price-Earnings Ratio (PE Ratio)? a) Stock price changes of a high PE Ratio company would often be staple compared to a low PE Ratio company b) Stock price changes of a high PE Ratio company would often be volatile compared to a low PE Ratio company c) The stock price changes of a high PE Ratio company would often be less volatile compared to a low PE Ratio company