Exam 1: Overview of Financial Reporting, Financial Statement Analysis, and Valuation

___________________________________ equals net income for a period plus or minus the changes in shareholders' equity accounts other than from net income and transactions with owners.

A firm obtains cash from short and long-term ____________________ and from issuing preferred and _________________________.

When assessing buyer power using Porter's five forces which of the following is not consistent with low buyer power?

The threat of new entrants is measured by whether there are entry barriers, such as capital investment, ________________________________________, patents, or regulation that inhibit new entrants.

Under the Sarbanes-Oxley Act financial statements must include both a Management Assessment and an Assurance Opinion. What information do the Management Assessment and an Assurance Opinion provide to financial statement users?

What three financial statements are prepared by business firms and what information does each provide?

______________________________ relates to the relative number of buyers and sellers in a particular industry.

Which of the following economic characteristics is consistent with a grocery store chain?

Which of the following is not one of Porter's five forces?

The tools for studying industry economics do not include

How easily can new firms enter a market is a question one might ask when assessing _____________________________________________.

Which of the following activities reported in the Statement of Cash Flows is a financing activity?

Prepare an analysis of the grocery industry using Porter's Five Forces framework. For each component force provide support for your conclusion. In addition, at the completion of your analysis provide a conclusion, along with support, of whether you expect the grocery industry to report high or low profitability in the near future.

The _____________________________________________ defines more clearly the explicit responsibility of managers for financial statements, the relation between the independent auditor and the firm audited and the kinds of services permitted and not permitted.

Labor contracts and purchase order commitments are examples of ____________________ contracts.

How easily can customers switch to substitute products is a question one might ask when assessing the ___________________________________.

The fourth step in financial statement analysis is using the financial statements to analyze the current ____________________ and ____________________ of the firm.

Many market participants argue that financial markets are efficient and that financial statement users cannot routinely analyze financial statements to find mispriced securities. This view would lead some to suggest that there is little value to financial statement analysis. Provide a discussion of the role of financial statement analysis in an efficient capital market and reasons why financial statement analysis is still valuable.

Nonmonetary assets include assets that are ____________________, such as inventories, and assets that are ____________________ such as brand names.

Statements that express all items in a particular financial statement as a percentage of some common base are called _________________________ statements.