6.02 Study Guide
The "optimal mix" of financing is known as _______
capital structure
Assets the company already owns are known as _______
equity
A measyre of how a business generates cash flow in relation to its invested capital is _______
return on capital
Money others owe to the business is referred to as _______
accounts receivable
The money the business owes is referred to as _______
accounts payable
A company's current balance of assets and liabilites falls under the focus of
Working capital management
Dividends can be paid in the form of cash or _______
stocks
The administration of assets refers to decisions about
Investments
Money the business owes is known as
Accounts payable
Money owed to the business is known as
Accounts receivable
Decisions about financing refer to the
Acquisition of funds
The cash conversion cycle should be
As short as possible
The finance function is usually responsible for which of the following processes:
Budgeting
Determining which projects a business should invest in is known as
Capital budgeting
Which of the following is a key component of managing working capital:
Cash Conversion Cycle
Assets a company already owns and can use to finance a new venture are called
Equity
When return on capital is positive, the company is
Growing in value
Which of the following is a capital investment decision
How to finance investments
The financing function ensures that the company's financial goals are
In line with organizational priorities
To keep communication flowing with other departments, the finance function depends on
Information systems
How does the fiance function relate to company spending?
It plans and controls spending
Finance is the business function that involves managing what? (KEYWORD - FINANCE)
Money
The finance function would definitely be involved in a decsion regarding
New business projects and strategies
Accounting is distinct from finance because its main focus is on
Record keeping activities
The goals of the finance function are to ensure profitablity and to
Reduce Risks
Which of the following is a measure of how well a business generates cash flow:
Return on capital
The finance and _______ functions are closely related and sometimes overlap
accounting
Working in capital management focuses on the company's current balance of _______
assets and liabilities
A capital investment decision regarding which projects a firm should invest in is called _______
capital budgeting
A ratio that refers to how long the company's money is "tied up" between purchasing raw materials and recieving cash for selling product is the _______
cash conversion cycle
The finance function plans and controls company _______
spending
The process of funding a business venture is called _______
financing
Administration of assets refers to decisions about _______
investments
Finance is the business function that involves about money _______
management
