Brainscape's Knowledge GenomeTM


Top Flashcards (Certified)
All Flashcards

Agribusiness Financial Analysis Exam #2 > Exam #2 > Flashcards

Exam #2 Flashcards

1
Q

The purpose of a _____________ is to measure the financial position of a business at any time through solvency and liquidity.

A

Balance Sheet

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

__________ measures the liabilities of a business relative to the amount of owner equity invested.

A

Solvency

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Provides indication that all debts can be paid if the business sold.

A

Solvency

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

If the business is _____________, it is bankrupt.

A

Insolvent

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

_____________ measures the ability to meet financial obligations when they come due without disrupting the flow of business.

A

Liquidity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

______ measures the ability to generate cash in the amounts at the time it is needed.

A

Liquidity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Liquidity/Solvency is a short-run concept.

A

Liquidity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Liquidity/Solvency is a long-term concept.

A

Solvency

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Can you be liquid, but not solvent?

A

Yes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Can you be solvent but not liquid?

A

Yes and no.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

________ can be sold to generate cash and used to produce other goods that in turn can be sold for cash in the future.

A

Assets

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Assets that can be used up, sold, or converted to cash in the next year as a normal part of business activities.

A

Current Assets

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

The most important liquid of all assets

A

Current Assets

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

___________ assets is where revenue is made

A

Current Assets

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

___________ assets are light outputs.

A

Current.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

___________ assets are inputs.

A

Noncurrent

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

___________ assets are any assets that are not classified as a current asset.

A

Noncurrent.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Piglets, hay, feed, calves, nails, are __________ assets.

A

Current

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Land, home, and breeding stock are ____________ assets.

A

Noncurrent

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

An obligation/debt owed to someone else is a _____________.

A

Liability

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

An outsider’s claim against 1 or more of the business’s assets is a ____________.

A

Liability

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Financial obligations that will become due and payable within 1 year from the date of the balance sheet is a ___________ liability

A

Current

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

________________ is a short-term issue.

A

Current liability

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

All obligations that do not have to be paid in full within the next year are __________ liabilities.

A

Noncurrent

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Liability that is typically a debt due in 1-10 years is an ____________ liability.
Intermediate
26
A debt due in 10+ years is a ________________ liability
Long-term.
27
_____________ represents the amount of money left for the owner of the business should that asset be sold and all liabilities paid as of the date of the balance sheet.
Owner Equity
28
_____________ = Net Worth
Owner Equity
29
Owner Equity is also known as: ___________
net worth
30
T/F - Owner equity can change due to profit or loss.
True
31
T/F - Owner equity can be changed using assets to produce crops and livestock?
True
32
Changes in the composition of assets and liabilities always cause a change in owner equity
False
33
_________ sets inventory and is valued to current market price.
Market Value
34
Valued at original cost.
Cost
35
__________ is valued at both cost and market value.
Lower of Cost or Market
36
Purpose of a ______________ is to obtain measures of the financial position and strengths of the business: liquidty, solvency, and other financial performance.
Balance Sheet
37
T/F - Liquidity is usually measured over the next accounting periods.
True
38
T/F - Liquidity concentrates on noncurrent assets and noncurrent liabilities.
False
39
T/F - Liquidity concentrates on current assets and current liabilities.
True
40
________________ = Current Asset Value / Current Liability Value
Current Ratio
41
T/F - With Current Ratio, a value less than one is ideal.
False
42
T/F - In Current Ratio, a value greater than 1 is ideal.
True
43
__________ measures liquidity using a dollar ($) amount.
Working Capital
44
___________ = Current Assets - Current Liabilities
Working Capital
45
Working Capital = ____________ - __________
Current Assets - Current Liabilities
46
T/F - When analyzing solvency, we measure the relative relations among total assets, total liabilities, and equity, which include non-current terms.
True
47
T/F - When assets are less than liabilities, the business is solvent.
False
48
T/F - When assets are greater than liabilities, the business is solvent.
True
49
____________ measures what part of total assets is owed to lendors.
Debt/Asset Ratio
50
__________ = Total Liabilities / Total Assets
Debt/Asset Ratio
51
Debt/Asset Ratio = ____________ / __________
Total Liabilities / Total Assets
52
__________ measures what part of total assets is financed by the Owners Equity Capital
Equity/Asset Ratio
53
T/F - Equity/Asset Ratio measures what part of total assets is financed by the Owners Equity Capital.
True
54
Equity/Asset Ratio = ___________ / ___________
Total Equity / Total Assets
55
________________ = Total Equity / Total Assets
Equity/Asset Ratio
56
Debt/Equity Ratio = __________ / __________
Total Liabilities / Owner Equity
57
___________ = Total Liabilities / Owner Equity
Debt/Equity Ratio
58
AKA: the leverage ratio
Debt/Equity Ratio
59
__________ compares the proportion of financing provided by lenders with that provided by the owner.
Debt/Equity Ratio
60
T/F - Not all cash receipts are revenues.
True
61
T/F - Gift/Inheritance is a revenue
False
62
T/F - All cash receipts are revenues.
False
63
T/F - Gift/Inheritance is NOT a revenue.
True
64
T/F - A loan from the bank is NOT a revenue.
True
65
T/F - A loan from the bank is a revenue.
False
66
T/F - Non-farm income is not a revenue.
True
67
T/F - Non-farm income is a revenue.
False
68
T/F - Expenses can be cash or noncash.
True
69
T/F - Expenses can only be cash.
False
70
Depreciation, accounts payable, accrued interest, and other accrued expenses are _________ expenses.
Noncash
71
T/F - Not every expenditure of cash is a business expense
True
72
T/F - Every expenditure of cash is a business expense.
False
73
T/F - Clothes, gifts, etc., cannot be listed as an expense.
True
74
T/F - Expenses on an income statement consist of only business expense items required to produce agricultural commodities and services.
True
75
The "O" in NFIO stands for ___________
Operations
76
_________ is concerned with the size of the profit relative to the size of the business, or the value of resources used to produce the profit.
Profitability
77
T/F - A business can show a profit but have poor profitability rating if this profit is small relative to the size of the business.
True
78
_________ is the amount by which revenue exceeds expenses plus any gain or loss on the sale of capital assets.
Net Farm Income
79
T/F - NFIO and NFI can be the same.
True
80
T/F - NFIO and NFI can NEVER be the same.
False
81
Why can NFIO and NFI sometimes be the same?
Because we do not sell/make/lose money on the sale of capital assets.
82
T/F - Net Farm Income is a true measure of profitability
False
83
T/F - Net Farm Income is NOT a true measure of profitability
True
84
____________ = Revenue - Expenses = NFIO +/- Gain/Loss = NFI
Net Farm Income
85
T/F - On a Return of Assets formula, you want a high %.
True
86
T/F - On a Return on Assets, you want a low %.
False
87
__________ = Return of Assets / Average Farm Asset Value X 100%
Return on Assets
88
T/F - Balance Sheet is a period in time.
False
89
T/F - Balance sheet is a point in time.
True
90
T/F - Income Statement is a period in time.
True
91
T/F - Income Statement is a point in time.
False
92
_____________ is the return on the owner's share of the capital invested.
Rate of Return on Equity
93
___________ = Return of Equity / Average Equity X 100%
Rate of Return on Equity
94
T/F - On Operating Profit Margin Ratio (OPMR), a higher value means more profit per dollar of revenue.
True
95
_________ = Operating Profit / Total Revenue X 100%
Operating Profit Margin Ratio
96
Operating Profit Margin Ratio = _____________ / ___________ X 100
Operating Profit / Total Revenue
97
Rate of Return on Equity = ______________ / _____________ X 100
Return of Equity / Average Equity
98
Return on Assets = __________________ / ___________ X 100
Return of Assets / Average Farm Asset Value
99
An ______________ is an estimate of the combination of inputs that can achieve the optimal level of output per unit of enterprise.
Enterprise Budgets
100
___________ is an individual crop or type of livestock.
Enterprise
101
A related portion of a business that can be treated as a unit
Enterprise
102
T/F - The primary purpose of a enterprise budget is to estimate the projected cost, returns, and profit for the enterprise.
True
103
T/F - Operating Profit Margin Ratio can be found at the local county extension agents to represent "typical" situations.
False
104
T/F - Enterprise budgets can be found at the local county extension agent's office to represent "typical" situations.
True
105
T/F - All expenses must be estimated on a per-unit charge in an enterprise budget.
True.
106
________ include only costs that will be incurred if the enterprise is actually done.
Operating Expenses
107
T/F - Ownership expenses are variable expenses.
False
108
T/F - Ownership expenses are fixed expenses.
True
109
T/F - Operating expenses are fixed expenses.
False
110
T/F - Operating expenses are variable expenses.
True
111
T/F - Fixed assets shared with other enterprises must be pro-rated for each enterprise they support.
True
112
__________ are costs that would exist whether or not the enterprise is operated.
Ownership Expense.
113
Two main analyses on an enterprise budget?
Cost of Production Analysis and Breakeven Analysis

Agribusiness Financial Analysis Exam #2 (1 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions