Finance for Non-Finance Managers Cheat Sheet 2026

The 30 highest-yield Finance for Non-Finance Managers facts, distilled from real exam questions. Print it, save it as a PDF, or study it here — free, no sign-up.

1. The COSO framework is widely used in risk management and internal controls. What does COSO stand for? → Committee of Sponsoring Organizations of the Treadway Commission
2. Working capital for the business is → $66,000
3. Overhead absorption rate is used to: → Allocate indirect (overhead) costs to products or cost centers
4. Basic earnings per share are computed as follows: → [Net Income-Preferred Dividends]/Weighted Avg # of common shares outstanding
5. A company's Weighted Average Cost of Capital (WACC) is most commonly used in capital budgeting as: → The discount rate to calculate NPV of average-risk projects
6. Which of the following best describes 'factoring' receivables? → Selling accounts receivable to a third party for immediate cash
7. A company reports EBITDA of $1,200,000 and total debt of $4,800,000. Its Debt/EBITDA ratio is: → 4x
8. What makes an excel pivot table unique → It is a tool for data summarization
9. If a project's IRR exceeds the company's required rate of return (hurdle rate), the project should generally be: → Accepted, because it creates value
10. When analyzing a company's profitability trend, which sequence of ratios provides the most complete picture from revenue to bottom line? → Gross margin → Operating margin → Net margin
11. Two companies have the same net profit margin but different ROEs. The company with the higher ROE most likely has: → Higher financial leverage or greater asset efficiency
12. What does a price-to-earnings (P/E) ratio of 20 mean for a stock priced at $40? → Investors pay $40 for $2 of annual earnings per share
13. What does a company's 'risk appetite' represent? → The level of risk a company is willing to accept in pursuit of its objectives
14. A company has $2M in total debt and $4M in total equity. Its debt-to-equity ratio is: → 0.5
15. Throughput costing (super-variable costing) treats which costs as the only true variable product costs? → Direct materials only
16. Retained profits are what: → Accumulated, undistributed earnings since inception
17. Which ratio best measures a company's ability to cover its interest payments from operating income? → Interest coverage ratio
18. A high days sales outstanding (DSO) typically indicates: → The company is collecting receivables slowly
19. Which of the following best describes a 'key risk indicator' (KRI)? → A forward-looking metric that signals the potential for increased risk exposure
20. Cashflows for the terminal year include the salvage value of the project's assets. → TRUE
21. Terminal value in capital budgeting refers to: → The salvage value and working capital recovery at project end
22. The cash conversion cycle measures: → The time between paying for inventory and collecting cash from sales
23. Under full absorption costing, which costs are included in inventory valuation? → All manufacturing costs, both fixed and variable
24. Net Present Value (NPV) is positive when: → The present value of cash inflows exceeds the initial investment
25. What is the primary purpose of a cash flow forecast? → To predict when a business will run short of or have excess cash
26. A startup projects revenue of $2M in Year 1, growing 50% annually for five years. What is the Year 5 revenue forecast? → $15.19M
27. When evaluating whether to eliminate an unprofitable segment, a manager should focus on: → Whether segment contribution margin covers its avoidable fixed costs
28. A company has sales of $500,000, variable costs of $300,000, and fixed costs of $120,000. What is the contribution margin ratio? → 40%
29. When two mutually exclusive projects have conflicting NPV and IRR rankings, managers should generally rely on: → NPV, because it measures absolute value creation in dollars
30. Which term describes money owed by customers for goods or services already delivered? → Accounts receivable