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Exam 8: Business Financial Analysis

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Question 41

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A deviation analysis allows an entrepreneur to quickly evaluate the performance of his or her organization on those items that are considered most important to the success of the firm.

A) True
B) False

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Question 42

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Any company analysis should proceed from the ________ and move toward the ________.

A) negative; positive
B) lowest; highest
C) general; specific
D) specific; general

E) B) and C)
F) A) and D)

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Question 43

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The ________ ratio estimates the number of times that a business could repay the current interest owed on its debt.

In the context of the importance of having a measurement focus, the standard parts of a business need to be managed in the simplest way possible and with minimal extra analysis.

A new small business does not need to worry about monitoring how well its inventory management system is operating.

Liquidity, activity, marketing, and profitability are the four basic categories of performance ratios.

The investors of Intra Dynamix request an evaluation of its profitability.The firm's managers provide them with an evaluation of the profit the firm is generating, focusing on how much each dollar invested in the firm is generating in profit.In the context of profitability ratios, the managers of Intra Dynamix are evaluating the firm's ________.

A sensitivity analysis surveys customers of a firm to see if their needs and desires are being met by the products or services the firm provides.

Dennis's stockholders want him to constantly improve his firm's ________ ratio because it would improve the future value of their investment in the firm.

There will always be ________ in surveys because only those individuals who wish to fill out the survey will do so.

________ ratios are used to examine the relative level of indebtedness of the entrepreneurial business.

Define liquidity ratios and detail two specific types.

A small business owner must constantly monitor the firm's performance because competitors, customers, and suppliers will change.

When evaluating the financial foundation of a business, the owner should consider

The ________ ratio examines the ability of a firm to return an overall profit compared to the amount of assets that has been invested into the effort.

________ are used to measure the level of indebtedness of a small business.

To obtain accurate and useful data from surveys, questions should be ________.

The evaluation of a firm starts with

Surveys are effective ways to analyze a business because the data they gather is free of bias.

A firm's financial liquidity can be measured by its