Quiz: Ultimate OIBDA Quiz
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Ultimate OIBDA Quiz
By: Staff
Image: refer to hsw

About This Quiz

Business accounts are getting more and more creative in the way that they calculate earnings. Test your knowledge of the murky world of earnings reports with our OIBDA challenge.

OIBDA stands for Operating Income Before Depreciation and Amortization. If you didn't get this one, you're in for a long quiz.

2.0 of 20
How often must publically traded companies issue an earnings report?

Earnings reports are issued quarterly based on the start of the company's fiscal year.

3.0 of 20
What are the three most important pieces of information on an earnings report for stockholders and potential investors?

The question that should be answered by an earnings report is, "Is the company making money or losing it?"

4.0 of 20
What does the acronym GAAP stand for in the field of accounting?

If you need "generally accepted" principles, then you know you work in a "creative" industry.

5.0 of 20
For investors, which of the following best represents a company's profitibility?

Non-operating income is more likely to represent a one-time gain, not consistent income.

6.0 of 20
Which of the following is considered non-operating income?

Gains from outside investments do not reflect a company's operating profitibility.

7.0 of 20
By ignoring depreciation and amortization, OIBDA leaves out which of the following expenses/losses from earnings reports?

Depreciation and amortization applies to one-time expenses, not normal operating expenses or "act of God"-type losses.

8.0 of 20
Is OIBDA approved under generally accepted accounting practices?

OIBDA is a non-GAAP accounting method, but that doesn't make it illegal.

Conveniently, many of these "extraneous" expenses would considerably lower the company's bottom line.

10.0 of 20
Are OIBDA numbers usually lower or higher than earnings calculated using GAAP methods?

In most cases, OIBDA earnings are significantly higher than GAAP numbers.

EBITDA (Earnings before interest, taxes, depreciation and amortization) is almost exactly the same as OIBDA, but is more widely accepted by investors.

12.0 of 20
Is the use of non-GAAP figures in an earnings report a bad or good sign for investors?

It's often the case that OIBDA or other non-GAAP calculations give a clearer picture of a company's current and future profitibility, but it's often a way to hide bad business performance, too.

13.0 of 20
Which of the following acronyms is NOT a method for calculating earnings?

Unlike the other choices, "Evita" is a popular rock opera by Andrew Lloyd Webber and a movie starring Madonna.

14.0 of 20
Can the difference between OIBDA and standard earnings calculations be the difference between profit and loss?

Absolutely. OIBDA calculations can turn a multimillion-dollar loss into a multimillion-dollar gain.

15.0 of 20
True or false: "Good will" is a business expense that can be amortized.

If a company pays more than the fair market value of an asset, the difference in prices is called good will.

The FASAB (Federal Accounting Standards Advisory Board) establishes GAAP standards on behalf of the American Institute of Certified Public Accountants.

17.0 of 20
What does the acronym EPS stand for on earnings reports?

Earnings per share is calculated by dividing a campany's net income by its total shares of public stock.

18.0 of 20
What exactly is the "interest" that is referred to in earnings before interest and taxes (EBIT)?

Both interest revenue and losses are excluded from EBIT earnings reports as well as OIBDA.

19.0 of 20
Which of the following business expenses would NOT qualify for depreciation?

Depreciation can only be used to spread out the cost of tangible assets, not intellectual property.

20.0 of 20
Are companies that publish OIBDA earnings required by the SEC to explain the methodology of their calculations?

The SEC requires companies to explain in plain English how their calculations deviate from GAAP standards.

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