Question 1

Which statement is used to project money coming in (receipts) and how and when it is spent (disbursements)?

Accepted Answer

A)  profit and loss statement 
B)  cash flow statement 
C)  pro forma balance sheet 
D)  pro forma income statement 
A)  profit and loss statement 
B)  cash flow statement 
C)  pro forma balance sheet 
D)  pro forma income statement

Question 2

What is the term for the ability of a company to meet its long-term debt obligations?

Accepted Answer

A)  equity 
B)  liquidity 
C)  solvency 
D)  working capital 
A)  equity 
B)  liquidity 
C)  solvency 
D)  working capital

Question 3

Profit margin is your net profit (before taxes) divided by total expenses.

Accepted Answer

A) True 
 B)False

Question 4

Cost of goods sold is the operating expenses you incur in the day-to-day operations of your business.

Accepted Answer

A) True 
 B)False

Question 5

Explain why a fast-growing company is more likely to experience cash flow difficulties than a slow-growing company.

Accepted Answer

Inventories and all other norm

Question 6

Which of the following can be predicted by an income projection?

Accepted Answer

A)  when you'll need to ask the bank for a loan 
B)  whether you'll have enough cash to pay the bills 
C)  when you should send out your invoices 
D)  when you'll make a profit on paper 
A)  when you'll need to ask the bank for a loan 
B)  whether you'll have enough cash to pay the bills 
C)  when you should send out your invoices 
D)  when you'll make a profit on paper

Question 7

You prepare a sales forecast after you have completed your pro forma income statement.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following resources recommended by the author provides inventory turnover results for similar businesses by industry category?

Accepted Answer

A)  Statistics Canada 
B)  Financial Planning Standards Council 
C)  Industry Canada SME Benchmarking Tool 
D)  Bank of Canada 
A)  Statistics Canada 
B)  Financial Planning Standards Council 
C)  Industry Canada SME Benchmarking Tool 
D)  Bank of Canada

Question 9

According to the text, which statement best describes inventory turnover?

Accepted Answer

A)  the number of times each month that a company replaces its inventory 
B)  total costs divided by average sales 
C)  a higher inventory turnover does not necessarily lead to higher profits 
D)  turnover that is greater than two means the business is being run effectively 
A)  the number of times each month that a company replaces its inventory 
B)  total costs divided by average sales 
C)  a higher inventory turnover does not necessarily lead to higher profits 
D)  turnover that is greater than two means the business is being run effectively

Question 10

Which of the following represent the two most important ratios?

Accepted Answer

A)  ROI and return on owner investment 
B)  current and debt-to-equity 
C)  ROI and current 
D)  debt-to-equity and return on owner investment 
A)  ROI and return on owner investment 
B)  current and debt-to-equity 
C)  ROI and current 
D)  debt-to-equity and return on owner investment

Question 11

Which of the following is the best definition of owner's equity?

Accepted Answer

A)  the amount of cash the owner invests into the business 
B)  the total value of what the business owns 
C)  what the business owes the owner 
D)  the profit earned by the owner 
A)  the amount of cash the owner invests into the business 
B)  the total value of what the business owns 
C)  what the business owes the owner 
D)  the profit earned by the owner

Question 12

Assets are the dollar value of what the business owns.

Accepted Answer

A) True 
 B)False

Question 13

Inventory is recorded on a pro forma income statement.

Accepted Answer

A) True 
 B)False

Question 14

After which time period is a holding considered a fixed asset?

Accepted Answer

A)  more than 1 year 
B)  more than 3 years 
C)  more than 5 years 
D)  more than 10 years 
A)  more than 1 year 
B)  more than 3 years 
C)  more than 5 years 
D)  more than 10 years

Question 15

On an opening balance sheet, prepaid expenses are a current liability.

Accepted Answer

A) True 
 B)False

Question 16

An expense that does not depend on sales is called a __________ _________.

Accepted Answer

The answer of An expense that does not depend on...

Question 17

A financial vision will not guarantee the success of your business.

Accepted Answer

A) True 
 B)False

Question 18

Why does a balance sheet balance?

Accepted Answer

A balance sheet must balance.

Question 19

Depreciation is part of your cash flow projection.

Accepted Answer

A) True 
 B)False

Question 20

Profits are a form of equity.

Accepted Answer

A) True 
 B)False

Which statement is used to project money coming in (receipts) and how and when it is spent (disbursements)?

What is the term for the ability of a company to meet its long-term debt obligations?

Profit margin is your net profit (before taxes) divided by total expenses.

Cost of goods sold is the operating expenses you incur in the day-to-day operations of your business.

Explain why a fast-growing company is more likely to experience cash flow difficulties than a slow-growing company.

Which of the following can be predicted by an income projection?

You prepare a sales forecast after you have completed your pro forma income statement.

Which of the following resources recommended by the author provides inventory turnover results for similar businesses by industry category?

According to the text, which statement best describes inventory turnover?

Which of the following represent the two most important ratios?

Which of the following is the best definition of owner's equity?

Assets are the dollar value of what the business owns.

Inventory is recorded on a pro forma income statement.

After which time period is a holding considered a fixed asset?

On an opening balance sheet, prepaid expenses are a current liability.

An expense that does not depend on sales is called a __ _.

A financial vision will not guarantee the success of your business.

Why does a balance sheet balance?

Depreciation is part of your cash flow projection.

Profits are a form of equity.

Your Great Adventure: Exploring Your Options

Spotting Trends and Opportunities

Positioning Yourself As an Entrepreneur

Profiling Your Target Customer

Learning From the Competition

Marketing: Pricing and Promoting

Marketing: Distribution and Location

Legal Concerns

Risk Management Issues

Financing Your Business

Building and Managing a Winning Team

Buying a Business

Buying a Franchise or Franchising

Pulling the Plan Together

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Exam 10: The Power of Numbers

Which statement is used to project money coming in (receipts) and how and when it is spent (disbursements)?

What is the term for the ability of a company to meet its long-term debt obligations?

Profit margin is your net profit (before taxes) divided by total expenses.

Cost of goods sold is the operating expenses you incur in the day-to-day operations of your business.

Explain why a fast-growing company is more likely to experience cash flow difficulties than a slow-growing company.

Which of the following can be predicted by an income projection?

You prepare a sales forecast after you have completed your pro forma income statement.

Which of the following resources recommended by the author provides inventory turnover results for similar businesses by industry category?

According to the text, which statement best describes inventory turnover?

Which of the following represent the two most important ratios?

Which of the following is the best definition of owner's equity?

Assets are the dollar value of what the business owns.

Inventory is recorded on a pro forma income statement.

After which time period is a holding considered a fixed asset?

On an opening balance sheet, prepaid expenses are a current liability.

An expense that does not depend on sales is called a __________ _________.

A financial vision will not guarantee the success of your business.

Why does a balance sheet balance?

Depreciation is part of your cash flow projection.

Profits are a form of equity.

Your Great Adventure: Exploring Your Options

Spotting Trends and Opportunities

Positioning Yourself As an Entrepreneur

Profiling Your Target Customer

Learning From the Competition

Marketing: Pricing and Promoting

Marketing: Distribution and Location

Legal Concerns

Risk Management Issues

Financing Your Business

Building and Managing a Winning Team

Buying a Business

Buying a Franchise or Franchising

Pulling the Plan Together

Filters

An expense that does not depend on sales is called a __ _.