Exam (elaborations)
WGU D366 STUDY QUESTIONS SECTION 1 (ANSWERED) CORRECTLY TO SCORE A+
- Course
- Institution
WGU D366 STUDY QUESTIONS SECTION 1 (ANSWERED) CORRECTLY TO SCORE A+
[Show more]
Content preview
WGU D366 STUDY QUESTIONS SECTION 1(ANSWERED) CORRECTLY TO SCORE A+
A firm is using estimates of what its share value is in order to make decisions
about whether to buy, sell, or hold onto its equity securities.
Which state of financial statement analysis is the firm involved in? Answer -
Step 6: Value the firm
During this step, the value of the firm is determined, often along with its
intrinsic value. This includes the intrinsic value and the selling prices for existing
assets of the firm at a given time.
As part of its financial statement analysis, a company is estimating what its
likely future profitability, growth, and risk will be, and, in turn, the likely future
returns from investing in the company.
Which step of financial statement analysis is the firm involved in? Answer -
Step 5: Preparing forecasted financial statements
As part of its financial statement analysis, a company is evaluating the business
model the firm is executing to be different and successful in its industry.
Which step of financial statement analysis is the firm involved in? Answer -
Step 2: Identifying the strategies the firm will use to gain and keep a
competitive advantage
Step 2 involves asking questions about the business model, current competitive
advantages, sustainability of that advantage, and if products are meeting
needs.
, As part of its financial statement analysis, a company is reviewing whether its
profit margin is increasing or decreasing over time.
Which step of financial statement analysis is the firm involved in? Answer -
Step 4: Using financial statements to analyze current profitability, growth, and
risk
Step 4 asks about the rate of return from assets, rate of return for common
equity shareholders, and whether profit margin is increasing or decreasing over
time.
A potential investor is identifying whether or not the company belongs to an
industry that includes a large number of firms selling the same product or only
a small number of firms selling unique products.
Which step of financial statement analysis is the potential investor involved in?
Answer - Step 1: Identifying the economic characteristics and competitive
dynamics of the industry in which the firm participates.
Step 1 involves asking about dynamic forces driving competition and how
technological change impacts competitive advantage.
As part of its financial statement analysis, an auditor is trying to determine
whether its client has selected a specific certain accounting method simply to
make the firm appear more profitable or less risky than economic conditions
otherwise suggest.
Which step of financial statement analysis is the auditor involved in? Answer -
Step 3: Obtaining and evaluating the quality of the information available from a
firm's financial statements
Step 3 involves asking questions about nonrecurring gains or losses in earnings,
if the firm is claiming certain assets or liabilities, or if the firm is using certain
accounting methods to make the firm appear more profitable.
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 EvaTee. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $13.99. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
75323 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now