When Evaluating a Balance Sheet, the Two Primary Questions Are

question 30

Multiple Choice

When evaluating a balance sheet, the two primary questions are:

• A) whether a firm has sufficient short-term assets to cover its short-term debts and whether it is profitable
• B) whether a firm is profitable and whether a firm is financially sound
• C) whether its costs of sales is going up and whether it is generating excess cash that could be used to pay down debt or pay dividends
• D) whether a firm has sufficient short-term assets to cover its short-term debts and whether it is financially sound
• E) whether a firm is profitable and whether it is generating excess cash that could be used to pay down debt or pay dividends

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Definitions:

Cumulative Probability Distribution

A cumulative probability distribution shows the probability that a random variable will take a value less than or equal to a specific value, summarizing the probabilities in a distribution up to a certain point.

Random Number Intervals

Defined ranges within which a random number can be generated, typically used in statistical sampling, simulations, and randomization techniques.

Simulation Run

A process by which a computer model is used to emulate a real-world process or system over time.

Monte Carlo Simulation

A computational algorithm that uses repeated random sampling to obtain numerical results, often used to estimate complex probabilistic or deterministic systems.