Financial Theory FAQs

  1. How Can I Access a Company's Earnings Report?

  2. What Can Cause a Negative Terminal Growth Rate?

  3. What Is the Effect of Price Inelasticity on Demand?

  4. What Are Working Capital Costs?

  5. Why Should an Investor Understand Accounting?

  6. What Are Some Examples of Current Liabilities?

  7. How do dividends affect the balance sheet?

  8. What is the difference between market capitalization and market value?

  9. How is an accrued interest entry made in accounting?

  10. Does a capital expenditure (CAPEX) immediately affect income statements?

  11. What is the difference between profitability and profit?

  12. What are the objectives of financial accounting?

  13. What are some examples of inherent risk?

  14. What are some examples of risk management techniques?

  15. What are some examples of horizontal integration?

  16. What does the current cost of living compare to 20 years ago?

  17. What does negative shareholders' equity mean?

  18. Are retained earnings listed on the income statement?

  19. What are the main differences between return on equity (ROE) and return on assets (ROA)?

  20. When is an expense ratio considered high and when is it considered low?

  21. What is the difference between standard deviation and variance?

  22. What is the difference between cash flow and fund flow?

  23. What is the difference between the standard error of the mean and standard deviation?

  24. Do dividends go on the balance sheet?

  25. How are profit margin and markup different?

  26. How do the balance sheet and cash flow statement differ?

  27. What's a good fixed asset turnover ratio?

  28. How do fixed assets and current assets differ?

  29. How is the acid test ratio calculated?

  30. What is an asset?

  31. How are current and noncurrent assets different?

  32. What is the difference between EBIT and EBITDA?

  33. How should I evaluate a company with negative cash flow investing activities?

  34. How are cost of goods sold and cost of sales different?

  35. How are EBITDA, EBITDAR, and EBITDARM different?

  36. How are operating income and EBITDA different?

  37. How are EBIT and operating income different?

  38. How do gross margin and contribution margin differ?

  39. What is the formula for calculating EBITDA?

  40. How are gross profit and EBITDA different?

  41. How can a company have a negative gross profit margin?

  42. What is the difference between the equity method and the proportional consolidation method?

  43. What costs are not counted in gross profit margin?

  44. What is the difference between a cash flow statement and an income statement?

  45. What are some common measures of risk used in risk management?

  46. How do gross profit margin and operating profit margin differ?

  47. What is the difference between CAPEX and OPEX?

  48. How do you calculate working capital?

  49. Why would a company buy back its own shares?

  50. Are depreciation and amortization included in gross profit?

  51. What does a high weighted average cost of capital (WACC) signify?

  52. How to calculate return on equity (ROE)?

  53. How does gross margin and net margin differ?

  54. How do gross margin and profit margin differ?

  55. Why is social responsibility important to a business?

  56. What is the formula for calculating earnings per share?

  57. How is asset turnover calculated?

  58. Are small cap companies more risky investments than large cap companies?

  59. Does the balance sheet always balance?

  60. What is a margin account?

  61. How does gross profit and net income differ?

  62. What is considered a healthy operating profit margin?

  63. Why would a company perform a reverse stock split?

  64. How do operating income and gross profit differ?

  65. How do earnings and revenue differ?

  66. How do operating income and revenue differ?

  67. Does gross profit include labor and overhead?

  68. How do operating income and net income differ?

  69. How do intangible assets show on a balance sheet?

  70. How do accounts payable show on the balance sheet?

  71. What are reverse stock splits?

  72. What are common examples of noncurrent assets?

  73. How do current assets and fixed assets differ?

  74. How do current assets and noncurrent assets differ?

  75. What are some examples of fixed assets?

  76. How do gross profit and gross margin differ?

  77. What is the formula for calculating profit margins?

  78. How do you calculate inventory turnover?

  79. What's a put-call ratio and why is it important?

  80. Which transactions affect retained earnings?

  81. What is the prime cost formula?

  82. How do the current ratio and quick ratio differ?

  83. What is a good or bad gearing ratio?

  84. What are general and administrative expenses?

  85. How do you calculate shareholder equity?

  86. What is the difference between yield and return?

  87. How do net income and operating cash flow differ?

  88. What are the pros and cons of stratified random sampling?

  89. How is computer software classified as an asset?

  90. Which is better for capital budgeting – IRR or NPV?

  91. How do budgeting and financial forecasting differ?

  92. How do the income statement and balance sheet differ?

  93. How do top-down and bottom-up investing differ?

  94. How company stocks move during an acquisition

  95. How operating expenses and cost of goods sold differ?

  96. What is considered a healthy EV/EBITDA?

  97. What changes in working capital impact cash flow?

  98. How do you calculate return on assets (ROA)?

  99. What is the difference between revenue and sales?

  100. How Are Book Value and Market Value Different?

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