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Questions and Answers
Which of the following equations correctly calculates the company's total operating assets?
Which of the following equations correctly calculates the company's total operating assets?
- $10 million - $4 million = $6 million (correct)
- $10 million + $6 million = $16 million
- $10 million + $4 million = $14 million
- $10 million - $6 million = $4 million
What is the value of the company's total equity?
What is the value of the company's total equity?
- $7 million (correct)
- $3 million
- $10 million
- $4 million
What is the value of the company's operating liabilities?
What is the value of the company's operating liabilities?
- $3 million
- $2 million (correct)
- $1 million
- $4 million
What is the value of the company's net operating assets?
What is the value of the company's net operating assets?
What is the value of the company's financial liabilities?
What is the value of the company's financial liabilities?
Which of the following assets would NOT be considered an operating asset?
Which of the following assets would NOT be considered an operating asset?
Which of the following liabilities would NOT be considered an operating liability?
Which of the following liabilities would NOT be considered an operating liability?
What is the formula to calculate net operating assets (NOA)?
What is the formula to calculate net operating assets (NOA)?
Which of the following statements is true about net operating assets (NOA)?
Which of the following statements is true about net operating assets (NOA)?
Which of the following is an example of a non-operating asset?
Which of the following is an example of a non-operating asset?
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Study Notes
Calculating Operating Assets
- Total operating assets = Total assets - Non-operating assets
- Non-operating assets include investments, idle assets, and assets not used in operations
Equity and Liabilities
- Total equity = Total assets - Total liabilities
- Operating liabilities = Accounts payable + Accrued expenses + Short-term debt
- Financial liabilities = Long-term debt + Debt not related to operations
Net Operating Assets (NOA)
- NOA = Total operating assets - Operating liabilities
- NOA represents the capital invested in the company's operations
- NOA is a measure of the company's investment in its operations
Non-Operating Assets and Liabilities
- Non-operating assets include investments, idle assets, and assets not used in operations
- Non-operating liabilities include debt not related to operations and long-term debt
Key Facts
- Operating assets are used in the company's operations
- Non-operating assets are not used in the company's operations
- Operating liabilities are related to the company's operations
- Financial liabilities are not related to the company's operations
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