An Operations Manager Benefits from an Integrated View of Business

question 61

True/False

An operations manager benefits from an integrated view of business organizations.

Grasp the importance of and techniques for horizontal and vertical analysis in evaluating a company’s financial performance and condition.

Identify and calculate different financial ratios such as debt to equity ratio, times interest earned, current ratio, and quick ratio.

Interpret the implications of changes in financial statement items over time and their impact on a company’s financial health.

Evaluate the risk associated with interest payments through the times interest earned ratio.

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Definitions:

Highly Liquid

Assets that can be easily converted into cash with minimal impact on their value.

Direct Method

A method of presenting the operating activities section of the statement of cash flows that reports components of cash flows from operating activities as gross receipts and gross payments.

Accounts Receivable

Represents money owed to a company by its customers for goods or services delivered but not yet paid for.

Indirect Method

A way of calculating cash flows for operational activities by starting with net income and adjusting for non-cash transactions.