Introduction
What is the name of the owner of The Academy gym?
Jordan Sharp
Where was The Academy located?
Ontario, Canada
What’s another name for the B/S?
A Statement of Financial Position
What’s another name for the I/S?
Statement of Operations or Statement of Earnings
What is the Current Ratio?
Current Assets / Current Liabilities
Is the fitness industry expanding or contracting?
Expanding
What are two competitors of The Academy?
Planet Fitness, Goodlife Fitness, Central Fitness Kitchener
What’s the accounting equation?
Assets = Liabilities + Shareholders’ Equity
What does the I/S report?
Revenues, Expenses, Gains, and Losses
What does the Acid-Test Ratio exclude from the current assets?
Inventories, Prepaid Items, Restricted Cash, and Deferred Taxes
What “kind” of gym is The Academy?
CrossFit Gym
Which group of CrossFit consumers focused more on cost and frequency of classes?
Beginners
What is Equity?
On a company's balance sheet, the amount of the funds contributed by the owners (the stockholders) plus the retained earnings
What are the two general approaches for I/S presentations?
Single-step and Multi-Step
What is a common way to analyze financial statements?
Ratio Analysis
Was The Academy a Corporation or Partnership?
Partnership
Which group of CrossFit consumers focused more on facility size, equipment, and proximity?
Competitive Athletes
What are long-term liabilities?
Liabilities that are carried over a number of years or at least more than one accounting cycle. Examples of long-term liabilities are mortgages payable, bonds payable, and long-term notes.
What is sales revenue less cost of goods sold?
Gross Profit
What are a company’s ratios compared to?
A Competitor Company or An Industry Average
How many years of operations had The Academy completed?
What were the two business opportunities that Jordan Sharp was considering for The Academy?
Opening a new location and a facility upgrade
Which of the following would not be a current asset? Accounts receivable, land, prepaid insurance, supplies?
Land is not a current asset because land will not turn into cash within one year of the balance sheet date.
What causes an increase to retained earnings?
Net Income
What is the difference between Liquidity Ratios and Solvency Ratios?
Liquidity refers to a company’s ability to convert its assets to pay its current obligations whereas Solvency refers to a company’s ability to pay its long-term debts