BBA 1st Year 2nd Sem MCQs on FMA-II

1.Which of the following depreciation methods assumes that an asset loses its value more rapidly in the earlier years of its useful life? A) Straight-line depreciation B) Double-declining balance depreciation C) Units of production depreciation D) Sum-of-the-years' digits depreciation

2. Under which depreciation method is the depreciation expense calculated based on the number of units produced or hours of operation? A) Straight-line depreciation B) Double-declining balance depreciation C) Units of production depreciation D) Sum-of-the-years' digits depreciation

3. Which depreciation method allocates an equal amount of depreciation expense to each year of an asset's useful life? A) Straight-line depreciation B) Double-declining balance depreciation C) Units of production depreciation D) Sum-of-the-years' digits depreciation

4. Which depreciation method is often considered the simplest and most commonly used for financial reporting purposes? A) Straight-line depreciation B) Double-declining balance depreciation C) Units of production depreciation D) Sum-of-the-years' digits depreciation

5. In the double-declining balance depreciation method, what is the salvage value of the asset? A) It is ignored. B) It is subtracted from the cost of the asset before calculating depreciation. C) It is used to determine the rate of depreciation. D) It is added to the depreciation expense.

6. Which depreciation method is also known as the reducing balance method? A) Straight-line depreciation B) Double-declining balance depreciation C) Units of production depreciation D) Sum-of-the-years' digits depreciation

7. Which depreciation method is based on the assumption that assets are more productive when they are new and less productive as they age? A) Straight-line depreciation B) Double-declining balance depreciation C) Units of production depreciation D) Sum-of-the-years' digits depreciation

8. Which depreciation method results in higher depreciation expense in the earlier years of an asset's life? A) Straight-line depreciation B) Double-declining balance depreciation C) Units of production depreciation D) Sum-of-the-years' digits depreciation

9. Under the sum-of-the-years' digits depreciation method, which year typically incurs the highest depreciation expense? A) The first year B) The last year C) The middle year D) The rate of depreciation remains constant each year

10. Which depreciation method may be more appropriate for assets that are used heavily in the early years of their lives and less so in later years? A) Straight-line depreciation B) Double-declining balance depreciation C) Units of production depreciation D) Sum-of-the-years' digits depreciation

Answers:

1. B) Double-declining balance depreciation

2. C) Units of production depreciation

3. A) Straight-line depreciation

4. A) Straight-line depreciation

5. A) It is ignored.

6. B) Double-declining balance depreciation

7. B) Double-declining balance depreciation

8. B) Double-declining balance depreciation

9. A) The first year

10.C) Units of production depreciation

11. Which of the following inventory valuation methods assumes that the cost of goods sold (COGS) consists of the most recent inventory purchases? A) FIFO (First-In, First-Out) B) LIFO (Last-In, First-Out) C) Weighted Average Cost D) Specific Identification

12. Under the FIFO method, which inventory items are assumed to be sold first? A) The items purchased most recently B) The oldest items in inventory C) The items with the highest cost D) The items with the lowest cost

13. Which inventory valuation method assumes that the cost of goods sold (COGS) consists of the oldest inventory purchases? A) FIFO (First-In, First-Out) B) LIFO (Last-In, First-Out) C) Weighted Average Cost D) Specific Identification

14. What is the primary advantage of using the FIFO method for inventory valuation during periods of rising prices? A) It results in a higher ending inventory valuation. B) It results in a lower cost of goods sold (COGS). C) It provides a better matching of current costs with current revenues. D) It reduces the risk of obsolescence.

15. Under the LIFO method, which inventory items are assumed to be sold first? A) The items purchased most recently B) The oldest items in inventory C) The items with the highest cost D) The items with the lowest cost

16. Which inventory valuation method is not allowed under International Financial Reporting Standards (IFRS)? A) FIFO (First-In, First-Out) B) LIFO (Last-In, First-Out) C) Weighted Average Cost D) Specific Identification

17. Which inventory valuation method may result in tax advantages during periods of rising prices? A) FIFO (First-In, First-Out) B) LIFO (Last-In, First-Out) C) Weighted Average Cost D) Specific Identification

18. Under the weighted average cost method, how is the average cost per unit calculated? A) By dividing the total cost of goods available for sale by the total number of units available for sale B) By taking the average of the costs of the oldest and newest inventory purchases C) By using the most recent inventory purchase cost D) By using the cost of the oldest inventory purchases

19. Which inventory valuation method provides the most accurate matching of current costs with current revenues during periods of changing prices? A) FIFO (First-In, First-Out) B) LIFO (Last-In, First-Out) C) Weighted Average Cost D) Specific Identification

20.Which inventory valuation method requires detailed records for each individual item in inventory? A) FIFO (First-In, First-Out) B) LIFO (Last-In, First-Out) C) Weighted Average Cost D) Specific Identification

Answers:

11. A) FIFO (First-In, First-Out)

12  B) The oldest items in inventory

13. B) LIFO (Last-In, First-Out)

14. C) It provides a better matching of current costs with current revenues.

15. A) The items purchased most recently

16. B) LIFO (Last-In, First-Out)

17. B) LIFO (Last-In, First-Out)

18. A) By dividing the total cost of goods available for sale by the total number of units available for sale

19. A) FIFO (First-In, First-Out)

20. D) Specific Identification

21. What is the purpose of a bank reconciliation statement? A) To record all transactions made by the bank B) To reconcile the difference between the bank balance per the company's records and the balance reported by the bank C) To calculate interest earned on deposits D) To determine the company's net income

22.Which of the following would not be included in the bank reconciliation process? A) Bank service charges B) Outstanding checks C) Deposits in transit D) Inventory valuation adjustments

23.Which side of the bank reconciliation statement represents the balance per bank? A) Debit side B) Credit side C) Neither, it's in the middle D) Both sides simultaneously

24.What does it mean if a check is outstanding in the context of a bank reconciliation? A) The check has been cashed by the bank B) The check has been issued but not yet cashed by the recipient C) The check has been lost or stolen D) The check has been rejected by the bank

25. Which adjustment would be made to the balance per books in a bank reconciliation? A) Add deposits in transit B) Subtract outstanding checks C) Add bank errors D) Subtract bank service charges

26. Which of the following is an example of a deposit in transit? A) A check deposited by the company that has not yet been recorded by the bank B) A check issued by the company but not yet cashed by the recipient C) A bank fee deducted from the company's account D) A check returned by the bank due to insufficient funds

27. Which of the following errors would be subtracted from the balance per bank in a bank reconciliation? A) A check recorded by the bank for a higher amount than what was actually issued by the company B) A deposit recorded by the bank for a lower amount than what was actually received by the company C) A bank service charge deducted by the bank D) A deposit made by the company but not yet recorded by the bank

28. In a bank reconciliation statement, what does it mean if the balance per books is greater than the balance per bank? A) The company has more cash than what the bank reports B) The bank has more cash than what the company reports C) The company has not yet received its bank statement D) The company's records are inaccurate

29. Which of the following adjustments is made to the balance per bank in a bank reconciliation statement? A) Subtract deposits in transit B) Add outstanding checks C) Subtract bank errors D) Add interest earned on deposits

30.What is the typical frequency at which a bank reconciliation should be performed? A) Quarterly B) Annually C) Monthly D) Bi-annually

Answers:

21.       B) To reconcile the difference between the bank balance per the company's records and the balance reported by the bank

22.       D) Inventory valuation adjustments

23.       B) Credit side

24.       B) The check has been issued but not yet cashed by the recipient

25.       A) Add deposits in transit

26.       A) A check deposited by the company that has not yet been recorded by the bank

27.       A) A check recorded by the bank for a higher amount than what was actually issued by the company

28.       A) The company has more cash than what the bank reports

29.       B) Add outstanding checks

30.    C) Monthly

31.       Which financial statement summarizes a company's revenues and expenses over a specific period? A) Balance Sheet B) Income Statement C) Statement of Cash Flows D) Statement of Retained Earnings

32.       What does the Balance Sheet report? A) The company's revenues and expenses B) The company's cash flows C) The company's financial position at a specific point in time D) The company's net income

33.       Which of the following items would typically appear on the asset side of a Balance Sheet? A) Accounts Payable B) Accounts Receivable C) Retained Earnings D) Common Stock

34.       What is the formula to calculate Net Income on the Income Statement? A) Revenue - Expenses B) Revenue - Cost of Goods Sold C) Assets - Liabilities D) Liabilities - Equity

35.       Which financial statement provides information about a company's cash inflows and outflows during a specific period? A) Balance Sheet B) Income Statement C) Statement of Cash Flows D) Statement of Retained Earnings

36.       What does the term "GAAP" stand for in accounting? A) Generally Accepted Auditing Practices B) Generally Accepted Accounting Principles C) Generally Authorized Accounting Practices D) Generally Acknowledged Accounting Procedures

37.       What is the purpose of the Statement of Cash Flows? A) To provide information about the company's sources of financing B) To detail changes in equity over a period of time C) To communicate the company's financial performance to investors D) To provide information about the company's cash inflows and outflows

38.       Which financial statement reports changes in a company's retained earnings over a specific period? A) Balance Sheet B) Income Statement C) Statement of Cash Flows D) Statement of Retained Earnings

39.       What is the main difference between the income statement and the balance sheet? A) The income statement reports revenues and expenses, while the balance sheet reports assets, liabilities, and equity. B) The balance sheet reports revenues and expenses, while the income statement reports assets, liabilities, and equity. C) The income statement reports the company's financial position at a specific point in time, while the balance sheet reports its financial performance over a specific period. D) There is no difference; they serve the same purpose.

40.    What is the purpose of financial statement analysis? A) To prepare financial statements for external reporting B) To provide information about a company's financial performance and position to stakeholders C) To compare a company's financial performance with industry benchmarks and competitors D) To summarize a company's cash flows during a specific period

Answers:

31.       B) Income Statement

32.       C) The company's financial position at a specific point in time

33.       B) Accounts Receivable

34.       A) Revenue - Expenses

35.       C) Statement of Cash Flows

36.       B) Generally Accepted Accounting Principles

37.       D) To provide information about the company's cash inflows and outflows

38.       D) Statement of Retained Earnings

39.       A) The income statement reports revenues and expenses, while the balance sheet reports assets, liabilities, and equity.

40.    C) To compare a company's financial performance with industry benchmarks and competitors

41.    Question: Which of the following best describes trend analysis?

 A) Comparing data over different time periods to identify patterns and predict future outcomes.

B) Analyzing data from different sources to understand market trends. 

C) Conducting surveys to gather opinions about current trends. 

D) Calculating the average of a dataset to determine its central tendency.

 Answer: A) Comparing data over different time periods to identify patterns and predict future outcomes.

 

 multiple-choice questions on trend analysis:

42. Which of the following is a primary objective of trend analysis? 

A) Identifying outliers in the dataset 

B) Predicting future patterns based on historical data 

C) Classifying data into different categories 

D) Calculating the median of the dataset

Answer: B) Predicting future patterns based on historical data

43.In trend analysis, what does a positive trend indicate? 

A) Increasing values over time 

B) Decreasing values over time 

C) No change in values over time 

D) Random fluctuations in values

Answer: A) Increasing values over time

44. Which statistical technique is commonly used in trend analysis? 

A) Regression analysis 

B) T-test 

C) Chi-square test 

D) ANOVA

Answer: A) Regression analysis

45. What is the purpose of extrapolation in trend analysis? 

A) Identifying trends in the data 

B) Projecting future values based on historical data 

C) Removing outliers from the dataset 

D) Calculating the standard deviation of the dataset

Answer: B) Projecting future values based on historical data

46. Which of the following is NOT a limitation of trend analysis? A) Difficulty in identifying short-term fluctuations B) Inability to handle non-linear trends C) Dependency on historical data accuracy D) Ability to predict future events with absolute certainty

Answer: D) Ability to predict future events with absolute certainty

47. What does a horizontal trend line indicate in trend analysis? A) Stable values over time B) Increasing values over time C) Decreasing values over time D) Random fluctuations in values

Answer: A) Stable values over time

48. Which type of trend analysis focuses on identifying seasonal patterns in data? A) Time series analysis B) Cross-sectional analysis C) Longitudinal analysis D) Comparative analysis

Answer: A) Time series analysis

49. In trend analysis, what does the coefficient of determination (R²) indicate? A) Strength of the relationship between variables B) Direction of the relationship between variables C) Magnitude of the trend observed D) Presence of outliers in the dataset

Answer: A) Strength of the relationship between variables

50. What is the main advantage of using moving averages in trend analysis? A) They smooth out short-term fluctuations in data B) They provide a precise estimate of future values C) They are less computationally intensive than other methods D) They can handle non-linear trends effectively

Answer: A) They smooth out short-term fluctuations in data

51.  Which of the following is a step in trend analysis? A) Hypothesis testing B) Data collection C) Factor analysis D) Cluster analysis

Answer: B) Data collection

 Multiple-choice questions on ratio analysis:

52. What is the primary purpose of ratio analysis? A) Identifying trends in the stock market B) Assessing a company's financial performance C) Analyzing consumer buying behavior D) Predicting changes in interest rates

Answer: B) Assessing a company's financial performance

53. Which financial statement is commonly used as the basis for ratio analysis? A) Income statement B) Balance sheet C) Cash flow statement D) Statement of retained earnings

Answer: B) Balance sheet

54. What does liquidity ratio measure in ratio analysis? A) Ability to generate profit B) Ability to meet short-term obligations C) Efficiency of asset utilization D) Long-term solvency

Answer: B) Ability to meet short-term obligations

55. Which ratio indicates the efficiency of inventory management? A) Current ratio B) Debt-to-equity ratio C) Inventory turnover ratio D) Return on equity ratio

Answer: C) Inventory turnover ratio

56. What does the debt-to-equity ratio measure? A) Profitability of the company B) Efficiency of asset utilization C) Proportion of debt financing to equity financing D) Ability to meet short-term obligations

Answer: C) Proportion of debt financing to equity financing

57. Which ratio indicates the profitability of a company relative to its sales? A) Gross profit margin B) Return on assets C) Earnings per share D) Price-to-earnings ratio

Answer: A) Gross profit margin

58. What does the current ratio measure? A) Efficiency of asset utilization B) Ability to meet short-term obligations C) Proportion of debt financing to equity financing D) Profitability of the company

Answer: B) Ability to meet short-term obligations

59. Which ratio measures the efficiency of utilizing assets to generate profit? A) Return on equity B) Debt ratio C) Asset turnover ratio D) Quick ratio

Answer: C) Asset turnover ratio

60. What does the price-to-earnings (P/E) ratio indicate? A) Efficiency of asset utilization B) Company's ability to meet short-term obligations C) Market's valuation of the company's stock relative to its earnings D) Proportion of debt financing to equity financing

Answer: C) Market's valuation of the company's stock relative to its earnings

61. Which ratio measures the proportion of a company's assets financed by debt? A) Debt ratio B) Quick ratio C) Return on assets D) Inventory turnover ratio

Answer: A) Debt ratio

Multiple-choice questions testing knowledge of the formulas used in ratio analysis:

62. What is the formula for the current ratio? A) Current Assets / Total Assets B) Total Liabilities / Current Assets C) Current Assets / Current Liabilities D) Total Liabilities / Total Assets

Answer: C) Current Assets / Current Liabilities

63. Which formula calculates the debt-to-equity ratio? A) Total Liabilities / Total Equity B) Total Assets / Total Equity C) Total Liabilities / Total Assets D) Total Equity / Total Assets

Answer: A) Total Liabilities / Total Equity

64. What formula is used to calculate the gross profit margin? A) (Net Income / Sales) x 100 B) (Gross Profit / Sales) x 100 C) (Operating Income / Sales) x 100 D) (Net Profit / Total Assets) x 100

Answer: B) (Gross Profit / Sales) x 100

65. Which formula calculates the return on assets (ROA)? A) Net Income / Total Assets B) Net Income / Total Equity C) Gross Profit / Total Assets D) Operating Income / Total Assets

Answer: A) Net Income / Total Assets

66. What formula determines the inventory turnover ratio? A) Cost of Goods Sold / Average Inventory B) Average Inventory / Cost of Goods Sold C) Sales / Average Inventory D) Average Inventory / Sales

Answer: A) Cost of Goods Sold / Average Inventory

67. Which formula calculates the quick ratio? A) (Current Assets - Inventory) / Current Liabilities B) Current Assets / Current Liabilities C) Current Assets / (Current Liabilities - Inventory) D) (Current Assets - Inventory) / Total Assets

Answer: A) (Current Assets - Inventory) / Current Liabilities

68. What formula is used to calculate the earnings per share (EPS)? A) Net Income / Total Equity B) Net Income / Number of Shares Outstanding C) Total Revenue / Number of Shares Outstanding D) Gross Profit / Number of Shares Outstanding

Answer: B) Net Income / Number of Shares Outstanding

69. Which formula determines the asset turnover ratio? A) Sales / Total Assets B) Net Income / Total Assets C) Total Assets / Total Liabilities D) Total Liabilities / Total Equity

Answer: A) Sales / Total Assets

70. What formula calculates the return on equity (ROE)? A) Net Income / Total Assets B) Net Income / Total Equity C) Total Equity / Total Assets D) Gross Profit / Total Equity

Answer: B) Net Income / Total Equity

71. Which formula determines the price-to-earnings (P/E) ratio? A) Market Price per Share / Earnings per Share B) Net Income / Earnings per Share C) Market Price per Share / Net Income D) Earnings per Share / Market Price per Share

Answer: A) Market Price per Share / Earnings per Share

Multiple-choice questions on the cash flow statement:

72. What is the primary purpose of a cash flow statement? A) Assessing a company's profitability B) Analyzing a company's financial position at a specific point in time C) Tracking the inflow and outflow of cash during a specific period D) Evaluating a company's ability to pay off its long-term debts

Answer: C) Tracking the inflow and outflow of cash during a specific period

73. Which section of the cash flow statement includes cash flows from operating activities? A) Financing activities B) Investing activities C) Operating activities D) Non-cash activities

Answer: C) Operating activities

74. What does a positive cash flow from operating activities indicate? A) The company is generating more cash than it is spending on operating activities B) The company is experiencing financial distress C) The company's profitability is decreasing D) The company is investing heavily in new projects

Answer: A) The company is generating more cash than it is spending on operating activities

75. Which section of the cash flow statement includes cash received from issuing bonds? A) Operating activities B) Investing activities C) Financing activities D) Non-cash activities

Answer: C) Financing activities

76. How is free cash flow calculated? A) Net Income - Dividends B) Operating Cash Flow - Capital Expenditures C) Cash from Investing Activities - Cash from Financing Activities D) Net Income + Depreciation

Answer: B) Operating Cash Flow - Capital Expenditures

77. What does a negative cash flow from financing activities indicate? A) The company is paying off debt B) The company is generating cash through financing activities C) The company is experiencing financial distress D) The company is investing in new projects

Answer: A) The company is paying off debt

78. Which section of the cash flow statement includes cash received from selling equipment? A) Operating activities B) Investing activities C) Financing activities D) Non-cash activities

Answer: B) Investing activities 

79. What does cash flow from investing activities include? A) Cash received from selling products or services B) Cash received from issuing bonds C) Cash paid for the purchase of equipment D) Cash received from customers

Answer: C) Cash paid for the purchase of equipment

80. What does the indirect method of preparing the cash flow statement involve? A) Listing all cash inflows and outflows directly B) Adjusting net income for non-cash items and changes in working capital C) Summarizing cash flows from operating, investing, and financing activities separately D) Reporting cash flows from investing activities first, followed by operating and financing activities

Answer: B) Adjusting net income for non-cash items and changes in working capital

81. Which section of the cash flow statement includes dividends paid to shareholders? A) Operating activities B) Investing activities C) Financing activities D) Non-cash activities

Answer: C) Financing activities

Multiple-choice questions on the cash flow statement:

82. What is the purpose of the cash flow statement? A) To assess a company's long-term financial health B) To evaluate a company's liquidity and solvency C) To provide information on a company's profitability D) To track the sources and uses of cash over a specific period

Answer: D) To track the sources and uses of cash over a specific period

83.  Which accounting principle does the cash flow statement adhere to? A) Matching principle B) Revenue recognition principle C) Conservatism principle D) Materiality principle

Answer: A) Matching principle

84. What is the purpose of the operating activities section in the cash flow statement? A) To show cash flows related to the purchase and sale of investments B) To show cash flows related to the issuance and repayment of debt C) To show cash flows related to the company's primary business operations D) To show cash flows related to dividends paid to shareholders

Answer: C) To show cash flows related to the company's primary business operations

85. Which financial statement is directly linked to the cash flow statement? A) Balance sheet B) Income statement C) Statement of retained earnings D) Statement of comprehensive income

Answer: A) Balance sheet

86. What does a negative cash flow from investing activities usually indicate? A) The company is generating cash through investing in new projects B) The company is paying off its long-term debts C) The company is experiencing financial distress D) The company is generating cash through financing activities

Answer: C) The company is experiencing financial distress

87. Which activity does not typically fall under the operating activities section of the cash flow statement? A) Receipts from customers B) Payments to suppliers C) Dividends received from investments D) Interest payments to lenders

Answer: C) Dividends received from investments

88. How are cash flows classified in the cash flow statement? A) Into three categories: operating, investing, and financing activities B) Into two categories: inflows and outflows C) Into four categories: operating, investing, financing, and non-cash activities D) Into five categories: cash from operations, cash from investments, cash from financing, cash from non-operating activities, and cash equivalents

Answer: A) Into three categories: operating, investing, and financing activities

89. What does a positive cash flow from financing activities indicate? A) The company is generating cash by selling off its investments B) The company is repurchasing its own shares C) The company is generating cash through borrowing or issuing stock D) The company is experiencing financial distress

Answer: C) The company is generating cash through borrowing or issuing stock

90. How are non-cash transactions treated in the cash flow statement? A) They are included in the operating activities section B) They are excluded from the cash flow statement C) They are included in a separate section labeled "Non-cash activities" D) They are included in the investing activities section

Answer: B) They are excluded from the cash flow statement

91. Which financial metric is calculated using information from both the income statement and the cash flow statement? A) Earnings per share (EPS) B) Return on assets (ROA) C) Free cash flow (FCF) D) Price-to-earnings (P/E) ratio

Answer: C) Free cash flow (FCF)

Multiple-choice questions on depreciation:

92. What is depreciation? A) Increase in the value of an asset over time B) Reduction in the value of an asset over time C) Cost of maintaining an asset D) Cost of acquiring an asset

Answer: B) Reduction in the value of an asset over time

93. Which of the following methods is used to calculate depreciation? A) Straight-line method B) Inventory method C) LIFO method D) FIFO method

Answer: A) Straight-line method

94. What does the straight-line depreciation method assume about an asset's depreciation? A) Depreciation expense remains constant over the asset's useful life B) Depreciation expense increases over the asset's useful life C) Depreciation expense decreases over the asset's useful life D) Depreciation expense fluctuates randomly over the asset's useful life

Answer: A) Depreciation expense remains constant over the asset's useful life

95. Which of the following is NOT a factor affecting depreciation? A) Salvage value B) Useful life C) Market demand D) Cost of the asset

Answer: C) Market demand

96. What is salvage value? A) Initial cost of an asset B) Value of an asset at the end of its useful life C) Total accumulated depreciation of an asset D) Value of an asset at the beginning of its useful life

Answer: B) Value of an asset at the end of its useful life

97. Which depreciation method allocates a higher depreciation expense in the early years of an asset's life? A) Double-declining balance method B) Sum-of-the-years'-digits method C) Units-of-production method D) Straight-line method

Answer: A) Double-declining balance method

98. How does depreciation affect the income statement? A) It increases net income B) It decreases net income C) It has no effect on net income D) It increases revenue

Answer: B) It decreases net income

99. What is the purpose of depreciating assets? A) To increase the value of assets B) To accurately reflect the decrease in value of assets over time C) To defer taxes on assets D) To accelerate tax deductions

Answer: B) To accurately reflect the decrease in value of assets over time

100.vWhich of the following is NOT a common depreciation method? A) Sum-of-the-parts method B) Double-declining balance method C) Units-of-production method D) MACRS method

Answer: A) Sum-of-the-parts method

101. How does depreciation impact a company's cash flow? A) It decreases cash flow B) It increases cash flow C) It has no impact on cash flow D) It decreases cash flow only in the short term

Answer: C) It has no impact on cash flow.

 

here are short note questions for each topic:

Depreciation:

1.       Explain the concept of depreciation and its significance in accounting.

2.       Describe the straight-line method of depreciation and provide an example of its application.

3.       Discuss the factors that affect the calculation of depreciation for an asset.

4.       Compare and contrast the methods of depreciation, highlighting their advantages and limitations.

5.       Analyze the impact of depreciation on financial statements and financial metrics.

Inventory:

1.       Define inventory and its role in business operations.

2.       Explain the FIFO and LIFO inventory valuation methods.

3.       Discuss the importance of inventory turnover ratio in assessing inventory management efficiency.

4.       Describe the risks associated with inaccurate inventory valuation.

5.       Evaluate the impact of effective inventory management on cash flow and profitability.

Ratio Analysis:

1.       Define financial ratios and their significance in financial analysis.

2.       Explain liquidity ratios and provide examples.

3.       Discuss the use of profitability ratios in assessing a company's performance.

4.       Analyze the DuPont analysis framework and its components.

5.       Evaluate the limitations of ratio analysis in financial decision-making.

Cash Flow Statement:

1.       Define the cash flow statement and its purpose.

2.       Explain the difference between cash flow and net income.

3.       Discuss the categories of cash flows included in the cash flow statement.

4.       Describe the importance of free cash flow in financial analysis.

5.       Analyze the relationship between the cash flow statement and other financial statements.