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Name __________________________________ University of Houston C. T. Bauer College of Business Finance 3332 Principles of Financial Management Quiz 1. Construct a simplified Income Statement beginning with Revenues and ending with Earnings Per Share. 2. Construct a simplified Balance Sheet. 3. List the types of financial statements commonly found in annual reports. 1. 2. 3. 4.
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Characterize each statement by circling  T  for True or  F for False. T F 1. The appropriate goal of the financial manager is to maximize the firm’s earnings per share. T F 2. Finance consists of three primary areas: Corporate finance, Investments, and Markets and  Institutions T F 3. For investment purposes, real estate is an example of a financial asset. T F 4. Financial assets can be characterized as fixed income, equity, or real assets. T F 5. Agency problems arise from the potential conflict of interest due to the separation of ownership and 
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Unformatted text preview: control. Name __________________________________ Quiz Solutions 1. Simplified Income Statement: Rev Revenues- Exp Less Operating Expenses EBIT Earnings before Interest and Taxes or Operating Income- Int Less Interest Paid EBT Earnings before taxes- taxes Less Income Taxes EAT Earnings after Taxes or Net Income EAT / Number of shares of Common Stock Outstanding = EPS 2. Simplified Balance Sheet: Assets Liabilities Short-term assets Short-term liabilities Long-term assets Long-term liabilities Common stock at par Additional paid in capital Retained earnings Total Assets Total liabilities and stockholders equity 3. Types of financial statements commonly found in annual reports: 1. Income statement 2. Balance sheet 3. Statement of cash flows 4. Statement of retained earnings Statements 2 and 5 are True....
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This note was uploaded on 02/13/2011 for the course FINA 3332 taught by Professor Darlachisholm during the Spring '08 term at University of Houston.

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