Balance sheet, market approach and earnings approach
Quiz by Sarah Ayyad
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10 questions
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- Q1What does the market approach in valuing a business focus on?The future growth potentialThe current assets and liabilitiesComparing it to similar businesses in the marketThe company's past earnings30s
- Q2Which approach focuses on a company's earnings to determine its value?Asset approachMarket approachBalance sheet approachEarnings approach30s
- Q3In a balance sheet, what does the term 'liabilities' refer to?The total cash on handThe total sales revenueThe ownership equity of shareholdersThe debts and obligations a company owes30s
- Q4What is the primary purpose of a balance sheet?To calculate the company's profit for the yearTo summarize daily salesTo list the company's employeesTo show a company's financial position at a specific point in time30s
- Q5What key component does the market approach rely on for business valuation?Future earnings predictionsEmployee satisfaction surveysDetailed financial statementsComparative sales data from similar businesses30s
- Q6Which of the following is NOT typically found on a balance sheet?LiabilitiesIncome from salesEquityAssets30s
- Q7What does the earnings approach primarily consider when valuing a business?Assets on the balance sheetCosts of productionCurrent market trendsFuture cash flows and profits30s
- Q8Which financial statement shows a company's assets, liabilities, and equity?Income statementBalance sheetCash flow statementStatement of changes in equity30s
- Q9Which approach would you use to value a business based on its recent sales transactions in the market?Market approachCost approachEarnings approachBalance sheet approach30s
- Q10What does equity represent on a balance sheet?The owners' claim on the assets of the companyThe cash flow from operationsThe company's total salesThe debts owed to creditors30s