FA Mod 6 Cash flow indirect method practice exam questions


FA Mod 6 Cash flow indirect method practice exam questions

Author
Message
NEAS
Supreme Being
Supreme Being (5.7K reputation)Supreme Being (5.7K reputation)Supreme Being (5.7K reputation)Supreme Being (5.7K reputation)Supreme Being (5.7K reputation)Supreme Being (5.7K reputation)Supreme Being (5.7K reputation)Supreme Being (5.7K reputation)Supreme Being (5.7K reputation)

Group: Administrators
Posts: 4.2K, Visits: 1.2K

FA Module 6 Cash flow indirect method practice exam questions

(The attached PDF file has better formatting.)

A firm’s financial statements show the following amounts:

    Calendar Year 20XX-1    Calendar Year 20XX
Cost of goods sold     438    416
Net revenue     823    869
Depreciation expense    77    87
Net income    251    287
    December 31, 20XX-1    December 31, 20XX
Accounts receivable     183    140
Inventory
        119    182
Accounts payable     173    143


60% of the firm’s sales are on credit. The current accounts on the balance sheet are cash and marketable securities, accounts receivable, accounts payable, and inventory.

Question 6.2: Receivables turnover

What is the receivables turnover for 20XX?

Answer 6.2: (869 × 60%) / ( (183 + 140) / 2) = 3.228

(receivables turnover = credit sales / average accounts receivable)


Question 6.3: Cash received from customers

What is the cash received from customers in 20XX?

Answer 6.3: 869 – (140 – 183) = 912

(cash received from customers = net revenue – Δ(accounts receivable) )


Question 6.4: Gross profit margin

What is the gross profit margin for 20XX?

Answer 6.4: 1 – 416 / 869 = 52.13%

(gross profit margin = 1 – cost of goods sold / net revenue)


Question 6.5: Inventory turnover

What is the inventory turnover for 20XX?

Answer 6.5: 416 / ( (119 + 182) / 2) = 2.764

(inventory turnover = cost of goods sold / average inventory)


Question 6.6: Inventory bought

What is the inventory bought in 20XX?

Answer 6.6: 416 + (182 – 119) = 479

(inventory bought = cost of goods sold + Δ(inventory) )


Question 6.7: Cash paid to suppliers

What is the cash paid to suppliers in 20XX?

Answer 6.7: 479 – (143 – 173) = 509

(cash paid to suppliers = inventory bought – Δ(accounts payable) )


Question 6.8: Payables turnover

What is the payables turnover for 20XX?

Answer 6.8: 479 / ( (173 + 143) / 2) = 3.032

(payables turnover = inventory bought / average accounts payable)


Question 6.9: Operating cash flow

What is the operating cash flow for 20XX? (Assume shareholder dividends are a financing cash flow.)

Answer 6.9: 287 + (912 – 869) + (416 – 509) + 87 = 324

(operating cash flow = net income + (cash received from customers – net revenue) + (cost of goods sold – cash paid to suppliers) + depreciation expense)


Question 6.10: Retained earnings

What is the change in retained earnings during 20XX?

Answer 6.10: 287 – 58 = 229

(Δ(retained earnings) = net income – shareholder dividends)


Attachments
GO
Merge Selected
Merge into selected topic...



Merge into merge target...



Merge into a specific topic ID...





Reading This Topic


Login
Existing Account
Email Address:


Password:


Social Logins

  • Login with twitter
  • Login with twitter
Select a Forum....











































































































































































































































Neas-Seminars

Search