# Question 5:

By**Dennis McCafferty**

### 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.

*This article was originally published on 02-14-2012*