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CIO Quiz: Test Your Finance Smarts

By Dennis McCafferty on 2012-02-14


We know that even an informal conversation with your CFO can make your head spin – given all of the finance jargon that your top money man likes to sprinkle into even casual chats. (Do you think they do this on purpose?) Still, given that you must work closely with your company’s finance execs – and may even directly report to the CFO – a firm command of financial terms can only benefit your career. With this in mind, we present these ten quiz questions to test your knowledge about balance sheets. The balance sheet, after all, serves as the fiscal bible for any company. Our questions here are taken from the book “Seeing the Big Picture: Business Acumen to Build Your Credibility, Career, and Company” (Greenleaf Book Group Press/available in March). In addition to detailed nuances of the balances sheet, author Kevin Cope explores the five key drivers of business: cash, profits, assets, growth and people. Cope is president/CEO of Acumen Learning, a business-training company. For more about the book,click here. Test your smarts with our quiz. As always, no help from Google allowed:

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Question 1:


The fundamental mathematical formula of any balance sheet is ...

Answer 1:


The fundamental mathematical formula of any balance sheet is ...Assets = Liabilities + Equity

Question 2:


What are the six key measures of a balance sheet statement?

Answer 2:


What are the six key measures of a balance sheet statement?Cash, current assets, total assets, current liabilities, total liabilities, shareholder’s equity.

Question 3:


How are assets listed?

Answer 3:


How are assets listed?From the most liquid in the beginning to the least.

Question 4:


What are current assets?

Answer 4:


What are current assets?Those that should be converted into cash within 12 months.

Question 5:


How is “return on assets” measured?

Answer 5:


How is “return on assets” measured?By dividing net income by total assets, thus measuring a company’s overall productivity.

Qustion 6:


How are liabilities listed?

Answer 6:


How are liabilities listed?In order of those due first through those due last. Current liabilities are due within 12 months.

Question 7:


How do you calculate current ratio?

Answer 7:


How do you calculate current ratio?Dividing current assets by current liabilities, thus indicating liquidity.

Question 8:


How is the debt-to-equity ratio defined?

Answer 8:


How is the debt-to-equity ratio defined?It’s the amount of debt used to finance the growth of a company over time in relation to its overall equity.

Question 9:


What are two common terms for shareholder’s equity?

Answer 9:


What are two common terms for shareholder’s equity?“Partners’ Capital” and “Owner’s Equity,” especially if the business is privately held.

Question 10:


Name four ways a CIO can make a positive impact on a balance sheet.

Answer 10:


Name four ways a CIO can make a positive impact on a balance sheet.Reduce/eliminate non-producing assets.Conserve cash.Negotiate better terms on credit/debt. Increase efficiencies with current tech assets to improve profitability.

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