Deck 7: Analyzing the Business

Question 1

Which of the following is a critical success factor for any business?

A) being environmentally friendly
B) meeting and exceeding customer needs
C) low employee turnover
D) increase in stock price

Answer 1

B

Question 2

In conducting a stakeholder analysis the two dimensions a company should assess of each stakeholder are which of the following?

A) potential to threaten the company and potential to cooperate
B) ability to invest and willingness to participate
C) potential for more investment and potential for raising objections
D) ability to bring in new investors and potential for disruption

Answer 2

A

Question 3

George has just graduated from college and has got his first full-time job.He needs a car to drive to his new job as it is not accessible by public transit.He still has student debt so he doesn't have a lot of money to spend,but wants something that is reliable.What is it that George is looking for in his purchase?

A) a deal
B) a bargain
C) value
D) quality

Answer 3

C

Question 4

Which of the following are affected by the decisions a business makes and therefore the business has a responsibility to consider them in those decisions?

A) stakeholders
B) politicians
C) competitors
D) stock brokers

Question 5

Going above the heads of sales people and customer service reps to complain is referred to as which of the following?

A) first-level communications
B) second-level communications
C) third-level communications
D) fourth-level communications

Question 6

Dave has a small clothing store.He wants to open a 2nd store but needs investors to finance his expansion.Investors will look at which of the following primary financial performance measurements to evaluate the store's performance?

A) cash flow
B) return on assets
C) inventory turnover
D) net sales

Question 7

For a company like Starbucks,what would their sustainable competitive advantage be?

A) great suppliers
B) the experience they creates for their customers
C) great products
D) their employee training

Question 8

The three most critical stakeholder groups of a corporation are which of the following?

A) shareholders, employees, customers
B) customers, investors, employees
C) employees, politicians, customers
D) employees, customers, competitors

Question 9

When a company makes use of SWOT analysis,one of its objectives is to do which of the following?

A) identify the best employees to fill each position within the organization
B) set specific short-term performance standards for each department
C) evaluate the desirability of issuing stocks or bonds in the current financial climate
D) identify the things it does well as an organization and the things it needs to improve

Question 10

In measuring,if a company has met customer needs through gap analysis,what is the first step?

A) determine the real gap that exists
B) measure the gap
C) determine the sources of the gap
D) take corrective action

Question 11

SWOT is the acronym for which of the following?

A) strengths, weaknesses, operations, and tactics.
B) strengths, weaknesses, opportunities, and threats.
C) strategies, work plans, operations, and tactics.
D) strategies, weaknesses, outcomes, and trends.

Question 12

Which of the following is one of the ways to measure financial performance?

A) value of assets
B) return on capital
C) gross sales
D) net worth

Question 13

What should a company do to build customer loyalty?

A) have a loyalty points program
B) offer discounts for regular customers
C) invite them to special customer appreciation nights
D) reducing an effort a customer must go through to get a problem solved

Question 14

AlumiPlate's SWOT analysis revealed that potential competitors would find it difficult to begin operations in this specialized metal-coating industry.Using the terminology of SWOT,this is an example of which of the following?

A) strength
B) economy of scale
C) opportunity
D) threat

Question 15

What is the ultimate indicator that a company has met and exceeded customer needs?

A) new customers
B) customer satisfaction rates
C) minimal loss of customers
D) customer loyalty

Question 16

Jennifer is starting college in September and she needs a computer.She doesn't have a lot of money,but needs something that she can do all her assignments on.She wants value,which can be best described as which of the following?

A) the lowest price
B) a quality product at a reasonable price
C) the highest quality product at the best price
D) the store that has the product she wants at the lowest price

Question 17

Companies measure their ability to encourage creativity and innovation by which of the following?

A) the percentage of sales that came from new ideas
B) number of ideas that are patented
C) how many creative awards they win
D) how many of their ideas get copied by other companies

Question 18

For a company like Starbucks,what would their distinctive competence be?

A) making great coffee into an experience
B) providing the best customer service
C) having musicians play in their stores
D) having the best and most expensive coffee

Question 19

For a company like Starbucks,what would their core competency be?

A) premium products
B) unique product offerings
C) great customer service
D) making great coffee

Question 20

A SWOT analysis is used to analyze which of the following about a company?

A) competitive position
B) internal controls
C) management structure
D) budgetary position

Question 21

What are two major projected financial statements developed during financial planning?

A) predicted statement of cash flows and predicted income statement
B) pro forma balance sheet and pro forma income statement
C) forecasted balance sheet and forecasted statement of cash flows
D) prototype retained earnings statement and prototype balance sheet

Question 22

"To enrich the lives of everyone in WestJet's world by providing safe,friendly,affordable air travel." Is best described as which of the following?

A) vision
B) goal
C) mission statement
D) objective

Question 23

An overall explanation of why an organization exists and where it is trying to head is referred to as which of the following?

A) tactical plan
B) prime directive
C) corporate charter
D) vision

Question 24

A meaningful mission statement should address topics about an organization such as which of the following? 

A) form of ownership and methods of financing
B) self-concept and company philosophy
C) advertising strategy and distribution plan
D) tactical plans and contingency plans

Question 25

Which of the following forecasts the sales,expenses,and net income for the company in some future time period?

A) inventory turnover ratio
B) net working capital
C) pro forma income statement
D) pro forma balance sheet

Question 26

"Make the best product,cause no unnecessary harm,and use business to inspire and implement solutions to the environmental crisis." This statement by Yvon Chouinard,founder of Patagonia,can be best described as which of the following?

A) a strategic plan
B) a direction
C) a mission statement
D) a tactical plan

Question 27

A vision for a company is which of the following?

A) an explanation of why the company exists and where it wants to go
B) the same thing as an objective
C) a detailed plan that outlines the major organizational structure of the company
D) very relevant for the short-term, but less useful for the long-term

Question 28

Gina Raiter,the president and CEO of AutoMotion Auto Service Centres,has asked several managers and employees to help establish a statement to outline the fundamental purposes of their company.The result of this effort is likely to be which of the following? 

A) payoff matrix
B) mission statement
C) tactical plan
D) organization chart

Question 29

Which of the following measures the ability to pay debts as they come due?

A) liquidity ratio
B) asset management ratio
C) leverage ratio
D) profitability ratio

Question 30

Employees often work with managers to develop which of the following that outlines the fundamental purposes of their organization?

A) organization chart
B) value statement
C) mission statement
D) PERT diagram

Question 31

The key numbers that financial managers use to calculate ratios usually come from which of the following financial statements of a company?

A) prospectus and operating budget
B) statement of cash flows
C) balance sheet and income statement
D) pro forma statements

Question 32

Which of the following are the four basic categories of financial ratios?

A) current, turnover, asset, and earnings ratios
B) liquidity, stability, ROI, and payback ratios
C) current, inventory, equity, and debt ratios
D) liquidity, leverage, ROI, and debt ratios

Question 33

Which of the following is a mathematical tool financial managers use to assess the financial strengths and weaknesses of their company?

A) CAD/CAM
B) value stream mapping
C) capital budgeting
D) ratio analysis

Question 34

Which of the following defines the organization's purpose,values,and core goals,providing the framework for all other plans?

A) mission statement
B) position statement
C) strategic plan
D) tactical plan

Question 35

Monica has just been hired by the Misty Mount Corporation to take over as the new chief executive officer.Her initial impression is that the company is in disarray,primarily because the employees do not have a sense of purpose or a common set of values.Monica's observations suggest that she needs to provide which of the following for Misty Mount?

A) vision
B) contingency plan
C) objective function
D) corporate logo

Question 36

When financial managers are concerned about the ability to pay off debts that will come due in the next year,they are likely to focus on which of the following?

A) liquidity ratios
B) capital budgets
C) incremental analysis
D) leverage ratios

Question 37

Customers who visit any Good As New Appliance Repair Centre see a framed statement prominently displayed near the front door.The plaque describes the company's fundamental purposes.In part,it states that "All Good As New Centres operate under the belief that every customer deserves good quality parts,fast and dependable service,and a fair price." The words on this plaque probably reflect which of the following of Good As New?

A) strategic plan
B) mission statement
C) corporate agenda
D) corporate charter

Question 38

As part of the financial planning process,planners would create projected financial statements,also known as which of the following statements?

A) pro forma
B) per capita
C) empirical
D) prescriptive

Question 39

In a company in which an effective vision has been provided,which of the following is the most likely result?

A) There is no need for tactical planning.
B) The economic and competitive environments tend to be much more predictable.
C) Employees are likely to have a sense of purpose and a common set of values.
D) Goals and objectives are no longer needed.

Question 40

For Google,to organize the world's information and make it universally accessible and useful is which of the following?

A) a tactical plan
B) a strategic plan
C) a direction
D) a mission

Question 41

Dayna is working for MNP Company.This is her first job out of college.She has been there for three years and despite doing outstanding work she has yet to get a promotion.There is a relatively new software company that is doing extremely well and is hiring.She has gathered information from databases and asked people in the industry about it.What should she specifically look at?

A) the profitability of the company for the last three years
B) their human resource policies
C) the potential for advancement
D) the benefit package

Question 42

XYZ company has just opened a factory in Bangladesh.Bangladesh has different laws than in Canada.The age that the law allows for young people to be employed full-time is much lower than in Canada.If XYZ hires employees that are younger than allowed by law in Canada but legal in Bangladesh what are the potential consequences?

A) The company will save money.
B) Canadians will have a negative view of the company.
C) The company can be charged under Canadian law.
D) The company will be charged under international law.

Question 43

Small business owner Barry Shain has always paid all of his current bills on time.However,this year he has more bills coming due than normal.Which type of ratio would help him evaluate whether he is likely to have enough cash to continue meeting his obligations over the next year?

A) liquidity ratio
B) managerial ratio
C) leverage ratio
D) profitability ratio

Question 44

ABC company has been very successful in Canada.However there is not much more room for growth in Canada so they have to expand internationally.What is the expectation of how they operate internationally?

A) how everyone else operates in the country they are in
B) by the laws of the country they are in
C) in a manner consistent as though they were operating in Canada
D) according to international law

Question 45

Which of the following compare(s)select items in financial statements by computing percentages,rates,and proportions?

A) profitability quotients
B) ratio analysis
C) vertical analysis
D) pro rata analysis

Question 46

Which of the following global business issues are important to Canadians?

A) fair trade
B) environment
C) global warming
D) workers' rights

Question 47

Which of the following indicates whether a company earned a profit or suffered a loss over the past accounting period?

A) balance sheet
B) income statement
C) statement of cash flows
D) cash budget

Question 48

Which of the following shows the money flowing into and out of a company through its operating,investing,and financing activities?

A) retained earnings
B) statement of cash flows
C) income statement
D) operating budget

Question 49

Which of the following is the income statement equation?

A) Owners' Equity - Assets = Liabilities
B) Net Income - Expenses = Revenue
C) Revenue - Expenses = Net Income
D) Assets = Liabilities + Owners' Equity

Question 50

What does the statement of cash flows show about a company?

A) money coming in and money going out
B) a schedule of payments for the debts that come due in the next year
C) a net profit or loss
D) the current assets and current liabilities that are likely to result in cash flows over the next accounting period

Question 51

Which of the following summarizes a company's financial position at a specific point in time (e.g.,a specific quarter or year)?

A) statement of cash flows
B) income statement
C) balance sheet
D) investment income statement

Question 52

Mark has just graduated from college.He is looking for a full-time job.He doesn't want to jump from company to company every year or two.He wants to have a long career preferably at one company.What is one of the questions he needs to ask himself before accepting an offer of employment?

A) Is the company financially sound?
B) has the company been around for a long time?
C) Do they promote from within?
D) how is their stock trading?

Question 53

Which of the following measures a company's ability to pay debts as they come due?

A) liquidity ratios
B) asset management ratios
C) leverage ratios
D) profitability ratios

Question 54

Which of the following projects the types and amounts of assets a company will require to carry out its future plans and forecasts the amount of additional funds that will be needed to acquire those assets?

A) prototype operating budget
B) statement of net working capital
C) pro forma income sheet
D) pro forma balance sheet

Question 55

Which of the following is used to predict when a company will likely experience temporary shortages or surpluses of cash?

A) statement of projected revenue flows
B) balance sheet
C) statement of cash flows
D) pro forma balance sheet

Question 56

Which of these would provide stakeholders with information about how a company obtained and used cash in the most recent accounting period,as well as its cash balance at the end of the accounting period?

A) cash budget
B) income statement
C) shareholders' equity statement
D) statement of cash flows

Question 57

Which item would be listed first on an income statement?

A) revenue
B) cost of goods sold
C) net operating income
D) retained earnings

Question 58

Lisa and Debbie are very serious shoppers.Every weekend they go to different malls around the city.They look for quality products at reasonable prices.But they also demand that the companies that they buy products from produce their products in which of the following ways?

A) in a safe, ethical manner
B) in an environmentally friendly manner
C) using only Canadian made components
D) following ISO 9000 and ISO 14000 rules

Question 59

In today's day and age,customers expect that companies not only provide value but demand that the companies be which of the following?

A) good corporate citizens
B) green companies
C) good to their employees
D) generous contributors to charity

Question 60

Companies are more likely to earn good publicity if they are which of the following?

A) good stewards of the environment
B) large donators to charity
C) big sponsors of community events
D) politically active

Question 61

One of the critical success factors for any business is providing value.

Question 62

A profitable company can still go bankrupt.

Question 63

The industry life cycle model analyzes the effects of an industry's evolution on competitive forces.

Question 64

Companies today cannot just provide what the customer wants.They need to satisfy customers beyond their expectations.

Question 65

SWOT stands for strengths,weaknesses,opponents,and threats.

Question 66

A distinctive competence is a unique core competence,something that a company can do better than the competition.

Question 67

An organization's mission statement is usually a complex document that provides a detailed description of the principles that guide the organization and the way those principles should be applied to its major business initiatives.

Question 68

The mission statement is used to differentiate an organization from its competition and further refines the direction articulated in the vision statement,answering such questions as,"Who are we?" and "What businesses are we in?"

Question 69

A vision statement outlines why the company exists and where it's going in the future.It clearly states the goals and objectives of the company and helps decision makers plan for future actions.

Question 70

In a SWOT analysis the strengths and weaknesses come from the internal environment (e.g.,financial,operations,marketing,and human resources).

Question 71

A sustainable competitive advantage is a competitive advantage that a company can continue to exploit over time as it is not easily duplicated.

Question 72

One of the critical success factors for any business is how environmentally friendly they are as a company.

Question 73

The three most critical and obvious stakeholder groups are the owners of the business (or shareholders in the case of a corporation),the employees of the business (and their union if represented by one),and the customers.

Question 74

The five stages of industry evolution are evolution,growth,shakeout,mature,and declining industry environment.

Question 75

Providing value means that a business must constantly strive to lower the price of its products and services.

Question 76

One way to measure if a business is meeting its customers' needs is through "third-level communications."

Question 77

Yvon Chouinard,Patagonia founder,believes in making the best products to inspire and implement solutions to the environmental crisis.He hires employees who appreciate the outdoors and share his vision.This is an example of building a business with employees who are motivated to support the company's mission.

Question 78

Stakeholders are affected by the decisions that the business makes,and therefore the business has a responsibility to consider them in those decisions.

Question 79

An income statement is the financial statement that reports revenues,expenses,and profit or loss resulting from a company's operations over an accounting period.

Question 80

Achieving financial performance is measured in a number of ways; the primary ones being profit,return on investment,cash flow,and net worth.