Small business Management ( exam )

Exam 4

1. Current assets minus current liabilities is referred to as ______ ____________ _______________.

2. Current assets divided by current liabilities is called __________________ _____________.

3. Cash budget is a listing of cash receipts and cash disbursements for a week or possibly a month.

a. True
b. False

4. __________ ________________ is a measure of what percentage of a firm’s assets are financed by debt.

5. The _________ ________ _______________ is a financial report showing a firm’s sources of cash as well as its uses of cash.

6. The ______________ ________________ is a financial report showing the amount of profits or losses from a firm’s operations over a given period of time.

7. _________________ reward an owner for investing in a company and constitute a primary source of financing for future growth.

8. Statements that project a firm’s financial performance and condition, including a firm’s projected profits, assets and financing requirements, and cash flows are called _____ ________ ___________________ ____________________.

9. Sales minus the cost of goods sold are called ______________ _____________.

10. Financing provided by creditors is called _________.

11. A firm’s raw materials and products held in anticipation of an eventual sale is called _______________.

12. ______________________ measures the degree to which a firm has current assets available to meet short-term debt.

13. The forecasting process requires an entrepreneur to exercise good judgement in planning, particularly when the planning is providing the basis for raising capital.

a. True
b. False

14. Stock shares that represent ownership in a corporation are called ________________ ____________.

15. Operating profits are earnings after operating expenses but before interest and taxes are paid.

a. True
b. False

16. Profits not paid out as dividends over the life of a business are called _______________ __________________.

17. Define and describe the three major components of a cash flow statement.

18. How are owner’s equity and debt different?

19. What determines a company’s profitability?

20. How are a startup’s financing requirements estimated?

21. A short-term loan is called a _________ ____ __________.

22. ________________ ____ ____________ is a measure of a firm’s profitability relative to the amount of its assets by dividing operating profits by total assets.

23. _____________ ____ _________________ is a measure of the rate of return that owners receive on their equity investment, calculated by dividing net profits by owner’s equity.

24. Distinguish between common stock and retained earnings.

25. Describe the process for estimating the amount of assets required for a new venture.