Business Degree Business Finance

Question 1

What does the term 'liquidity' refer to in business finance?

Accepted Answer

The ability to quickly convert assets to cash

Answer

The total value of company assets

Answer

The ratio of debt to equity

Answer

The profitability of a business

Question 2

Which financial statement shows a company's revenues and expenses over a period of time?

Accepted Answer

Income statement

Answer

Balance sheet

Answer

Cash flow statement

Answer

Statement of retained earnings

Question 3

What is the formula for calculating Return on Investment (ROI)?

Accepted Answer

(Net Profit / Cost of Investment) × 100

Answer

(Revenue / Total Assets) × 100

Answer

(Equity / Debt) × 100

Answer

(Gross Profit / Revenue) × 100

Question 4

What is a 'bond' in the context of business finance?

Accepted Answer

A debt instrument issued to raise capital

Answer

A share of company ownership

Answer

A type of insurance policy

Answer

A government tax incentive

Question 5

What does 'working capital' measure?

Accepted Answer

A company's short-term operational liquidity

Answer

Long-term investment capacity

Answer

Total shareholder equity

Answer

Annual revenue growth

Question 6

Which concept refers to the idea that a dollar today is worth more than a dollar in the future?

Accepted Answer

Time value of money

Answer

Compound interest

Answer

Opportunity cost

Answer

Inflation premium