Financial Literacy Survey Answers

Regan Garey

Thank you to the approximately 100 individuals who participated in my financial literacy survey. The answers to the survey can be found on this link below. The graphical depiction of the results will be utilized in a future publication.

This survey illustrated in a concrete fashion that some members of the HR community would benefit from training in financial literacy concepts including Financial Statements.

Thank you for your participation.

Dr. Regan Garey

                      www.acctliteracy.com

The primary goal of the Statement of Cash Flows is to: See how much net income has been spent x See the many components of what makes cash increase and decrease See how much cash is available at the beginning of the year See how much only operating changes impact cash

The Components of the Balance Sheet are: revenue and expenses assets, liabilities and revenue X assets, liabilities and owners’ equity cash from operating and financing activities

Financial Literacy Survey Answers Regan Garey Thank you to the approximately 100 individuals who participated in my financial literacy survey. The answers to the survey can be found on this link below. The graphical depiction of the results will be utilized in a future publication. This survey illustrated in a concrete fashion that some members of the HR community would benefit from training in financial literacy concepts including Financial Statements. Thank you for your participation. Dr. Regan Garey www.acctliteracy.com The primary goal of the Statement of Cash Flows is to: See how much net income has been spent x See the many components of what makes cash increase and decrease See how much cash is available at the beginning of the year See how much only operating changes impact cash The Components of the Balance Sheet are: revenue and expenses assets, liabilities and revenue X assets, liabilities and owners’ equity cash from operating and financing activities List the components of the following Financial Statements: Income Statement Revenue – Expenses = Net Income Statement of Owners’ Equity Beginning Capital + Net Income – Withdrawals Balance Sheet Assets = Liabilities + Capital Statement of Cash Flows Operating, Financing and Investing

Accrual accounting is (more than one answer may apply): Too complex x More relevant than cash basis x Records transactions regardless of when cash changes hands

Financial Ratios express the relationship between two numbers and if you are able to calculate and interpret some ratios from each of the four classifications of ratios, the job of analyzing the financial statements can be accomplished more thoroughly. Please note which ratios you are familiar with: Liquidity ratios including the current raio, quick ratio Profitability ratios including operating margin and return on total assets Asset Management ratios including total asset turnover and age of facility ratio Debt management ratios including LT debt to net assets and times interest earned ratio None of the above

The Statement of Cash Flows is critical in understanding which of the following area(s): Changes in cash flow from operations such as accounts receivable and accounts payable Changes in cash flow from investing such as equipment The many increases and decreases in different accounts which explain the change in ending cash from last year to this year X All of the above Unsure

Debt financing is critical because: (there may be one or more than one correct answer) Interest expense is not part of EBIT X Interest expense is not tax deductible X Interest expense is tax deductible x More debt means higher leverage which can decrease the organization's ability to obtain more credit