HBX CORE FINAL EXAM QUESTIONS WITH CORRECT
VERIFIED SOLUTIONS 100% GUARANTEED PASS
(LATEST UPDATE)
Deferred Tax Asset - ANS ✓Arises when taxable income exceeds Income Before
Taxes due to a temporary timing difference.
When a deferred Tax Asset arises it means a company is recognizing Tax
Expense now on an amount of income that will be reflected in the financial
records later.
Income Before Taxes - ANS ✓The amount shown on the Income Statement after
all expenses have been taken away from the revenue for the period but before
any tax expense for the period. May also be referred to as Pretax Profit.
Profit Margin - ANS ✓(Net Income/Sales ) measures the ability of a company to
make a profit relative to revenue generated during a period. A Profit Margin of
19% tells us that for every $100 in sales, $19 ended up in Net Income.
Profit Margin - ANS ✓Profit Margin (Net Income/Sales) measures the ability of a
company to make a profit relative to revenue generated during a period.
In Excel Net Income/Revenue.
Average Collection Period - ANS ✓365/AR Turnover =365/(Credit Sales/
Average AR Balance)
Current Ratio - ANS ✓The current ratio is a measure of a business' ability to pay
its short term obligations.
HBX CORE
, 2
HBX
Quick Ratio - ANS ✓measures the ability of a company to use its quick assets to
pay off its short-term debts.
Debt to Equity Ratio - ANS ✓measures a company's leverage, not ability to pay
off its debts.
Indirect Method to create the Statement of Cash Flows - ANS ✓A gain, an
increase in operating assets, and a decrease in operating current liabilities would
all need to be subtracted from net income in order to convert net income into
operating cash flow when using the indirect method to create the Statement of
Cash Flows.
Gordon Growth Model - ANS ✓A method for calculating the terminal value of an
indefinite stream of cash flows. The calculation gives the present value of infinite
cash flows by dividing the cash flow in the final year of our projection by the
difference between the discount rate and the growth rate.
Cash Conversion Cycle - ANS ✓is a measure of how long it takes a business from
the time it has to pay for inventory from its suppliers until it collects cash from its
customers.
It can be calculated as Days Inventory, plus the Average Collection Period,
minus the Days Purchases Outstanding.
DuPont Framework - ANS ✓A framework of ratios that breaks down Return on
Equity (ROE) into the three components of Profitability, Efficiency, and Leverage.
Liabilities - ANS ✓increase with a credit.
Winner's Curse - ANS ✓A phenomenon that occurs in auctions in which the
winner of the auction will tend to pay more for a product or service than its true
value.
HBX CORE
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller DoctorKen. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $7.99. You're not tied to anything after your purchase.
