FREE Financial Forecasting And Planning Questions and Answers

Question 1

Financial forecasting typically starts by:

Accepted Answer

Sales forecast

Answer

Capital expenditure forecast

Answer

Collection forecast

Answer

Cash flow forecast

Question 2

The creditors use this financial statement to assess whether a company is making enough money to cover its debts.

Accepted Answer

Statements of profit or loss

Answer

Statements of financial position

Answer

Statements of equity

Answer

Statements of cash flows

Question 3

AFN is an equation that illustrates the relationship between an organization's external funds and its .

Accepted Answer

Projected increase in assets, spontaneous increase in liabilities, and its increase in retained earnings

Answer

None of the above

Answer

Projected increase in sales, spontaneous increase in equity, and increase in liabilities

Answer

Spontaneous increase in capital, projected increase in expenses, and increase in liabilities

Question 4

Short-term loans are included in the spontaneous increase in liabilities in the AFN (Additional Funds Needed) equation.

Accepted Answer

FALSE

Answer

TRUE

Question 5

Profit retained for reinvestment is the accumulated business profit that is not distributed as a dividend to shareholders.

Accepted Answer

Retained earnings

Answer

Equity

Answer

Net Profit

Answer

Cash

Question 6

While the average payment period gauges the company's liquidity, the average collection period measures the company's solvency.

Accepted Answer

FALSE

Answer

TRUE

Question 7

If the inventory turnover is ____ and the accounts receivable turnover is ____, the business is said to be efficient.

Accepted Answer

High, Low

Answer

Low, High

Question 8

The ability of a company is gauged by its asset turnover ratio.

Accepted Answer

Generate sales from assets

Answer

Generate income relative to revenue

Answer

Pay off long-term liabilities

Answer

Pay off short-term liabilities

Question 9

Whatley's twin made what marketing choice to boost sales?

Accepted Answer

Attend trade shows

Answer

Commercials in television

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Billboards

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Advertising in trade journals

Question 10

Which of the following sums up a budget the best?

Accepted Answer

A plan for saving and spending money

Answer

A financial tool for consumers with little money

Answer

A set of restrictions on how to spend money

Answer

A statement of your assets and liabilities