(Financial Data) Flashcards

Which financial data standard defines a common language for electronic communication of business and financial data?

Answer: XBRL

XBRL (eXtensible Business Reporting Language) is the global standard for exchanging business and financial information.

A data analyst notices that a company's balance sheet does not balance. Which accounting identity should hold true?

Answer: Assets = Liabilities + Equity

The fundamental accounting equation states that Assets must equal Liabilities plus Shareholders' Equity.

When normalizing financial data across multiple companies, which challenge is most commonly encountered?

Answer: Differences in fiscal year end dates and accounting policies

Companies adopt different fiscal year calendars and accounting policy choices (e.g., depreciation methods), requiring normalization before comparison.

Which metric best measures how efficiently a company uses assets to generate profit?

Answer: Return on Assets (ROA)

ROA = Net Income / Total Assets, directly measuring how much profit is generated per dollar of assets.

In financial data management, what is a 'mark-to-market' valuation?

Answer: Valuing an asset at its current market price rather than historical cost

Mark-to-market (fair value accounting) records assets and liabilities at their current market value each reporting period.

What does the P/E ratio measure in equity financial data?

Answer: Price per share relative to earnings per share

The Price-to-Earnings ratio divides a stock's current share price by its earnings per share to indicate valuation.

A CDP candidate is building a data pipeline for SEC 10-K filings. Which identifier uniquely distinguishes each SEC registrant?

Answer: CIK (Central Index Key)

The SEC assigns every registrant a unique Central Index Key (CIK) used to identify filers in EDGAR.