Exam 13: Using Financial Statements to Guide a Business

Steve starts his business on January 1,and compiles all of his first month's sales and expenses and does his financial statements on February 1.Is Steve doing a good job with his record keeping?

Successful entrepreneurs use their financial records to prepare ________ income statements that show sales and costs for the previous period.

If revenues are greater than expenses,the income statement balance will be positive,showing that the business has incurred loss.

Contribution margin equals revenues plus COGS and other variable costs.

How does a debt-to-equity ratio help describe the financial health of a company?

Owner's equity is the difference between assets and liabilities.

Ideally,you want to have a positive "double" bottom line.This means ________.

Describe the parts of an income statement.

You can create ________ from your income statement that will help you analyze your business further.

Entrepreneurs use a(n)________ to track assets and liabilities.

In the income statement,gross profit minus fixed operating costs equals ________.

How would you express a ratio as a percentage?

To see how costs are affecting net profit,try analyzing the income statement by expressing each item on the income statement ________.

The return on sales ratio is ________.

A balance sheet is a financial statement that shows the assets,liabilities,and cash flow of a business.

An income statement shows whether the difference between revenues (sales)and expenses (costs)is a profit or a ________.

Businesses in different countries prepare and present income statements in the same way anywhere in the world.

Which of the following is not something that can be invested?

What analytic tool allows you to compare income statements from different periods,even if the dollar figures are very different?

Jared analyzed the income statement for his independent label and found that for every dollar of sales,30 cents was spent on cost of goods sold.The gross profit per dollar was 70 cents.If 20 cents was spent on operating costs and 10 cents on taxes,what is the net profit per dollar?