BUSI 435 Quiz 4 with Answers
- Slow accounts receivable are a real danger to a small business because they often lead to cash crises.
- Liquidity ratios (such as the current and the quick ratios) tell whether a small business will be able to meet its short-term obligations as they come due.
- For Meters, Inc., refer to the following information to answer the question(s) below: Meters, Inc., reported net sales of $874,916 and a net profit of $74,563 on its most recent income statement. The company’s balance sheet shows total assets of $342,742 and total liabilities of $88,367.
- The income statement is based on the fundamental accounting equation:Assets = Liabilities + Owner’s Equity.
- ________ ratios indicate how efficiently the small firm is being managed.
Cash requirements can be determined by dividing cash expenses by ________.
- The ________ ratio measures the percentage of total assets financed by a small company’s creditors compared to its owners.
- The break-even point is the level of operation at which a business neither earns a profit nor incurs a loss, and lets the business owner know the minimum level of activity required to keep the firm in operation.
- A cash budget is only as accurate as the ________ forecast from which it is derived.
- Since even the best sales forecast will be wrong, the small business owner should prepare three forecasts – optimistic, pessimistic, and most likely.
- Mini-Case 12-3: Rent-A-Nerd Computer Consultants. The owners of Rent-A-Nerd Computer Consultants have prepared the partial cash budget for the upcoming quarter:
- It is estimated that approximately ________ thousand companies, most of them small, engage in barter exchanges every year.
When trying to prevent employee theft, business owners should create a “police state” environment and trust no one.
- The first line of defense against bad debt losses is to have a financial institution extend loans to credit-seeking customers.
- When investing surplus cash, the small business owner’s key objectives should be on the ________ of the investment.
- Many banks allow entrepreneurs to schedule their loan payments to fit their company’s cash flow cycles.
- A(n) ________ is when a company raises capital by selling shares of its stock to the general public for the first time.
- Venture capital companies reject 90 percent of the proposals they receive because they don’t meet the firms’ investment criteria.
- While equity capital represents the personal investment of the owner(s) of a business and does not have to be repaid, debt capital is a liability that must be repaid with interest in the future.
The first place an entrepreneur should look for startup capital is ________.
- The Boat and Ski Shop, a small retail boat shop, would most likely rely on which of the following methods to finance inventory?(busi 435 quiz 4)
- Rule ________ of the Regulation D exemptions is the most popular.
- The document outlining the details of the agreement between the entrepreneur and the stock underwriter is called ________.
- The most common method used by commercial finance companies to provide credit to small businesses is ________.
- So, in the following is not an asset-based financing technique?