PGA Level 1 Test - Business Planning

A vision defines the short-term objectives that must be accomplished in the upcoming year.

False

What is the correct budget category for labor forecasts?

Golf operation expenses

Consider the following statement as part of a business plan: "Improve range profits and customer satisfaction." According to the Business Planning course, this statement is an example of an objective

False

Cost of goods sold is an example of qualitative data

False

Mission statements should include a definition of the facility's underlying financial model.

False

According to the Business Planning Course Manual, what is usually the largest contributor to bottom-line profit of the facility?

Rounds of golf played

What important characteristic is missing in the business objective: "Increase pro shop sales next year?"

Specific numbers and details

What is the baseline reason for analyzing variances?

To spot variances early and take remedial action before they escalate into major business concerns

Financial forecasts should be based on historical data derived from a linear trend analysis.

True

Helping establish a starting point for goals, objectives, and related strategies is an appropriate use of the SWOT analysis.

True

The process for developing a business plan starts before you establish the goals you would like to achieve for the shop's coming year

True

Lack of a mission statement is an example of a weakness that a SWOT analysis might disclose?

True

Consider the following table. Based on trend analysis, what forecast would be made on the number of weekend rounds that will be played in year five? YEAR: 12345 WEEKEND ROUNDS: 16,000 14,500 16,800 17,400 ?

17,795

For the purpose of developing a business plan, what is the best description of trend analysis?

Being able to understand and then forecast metrics that are relatively stable over time

A cash flow budget is primarily concerned with what measure?

Cash on hand for the facility operation during the accounting period

What events would cause a change in the forecast for golf shop expenses?

Inflation, depreciation, taxes

What is the formula for Merchandise Net Operating Income?

Revenue - (cost of goods sold + operating expense) = Net Operating Income

You are in the process of completing a business plan for the golf shop. Initial forecasts of sales, expenses, and profit have been made. Past data has been analyzed and important inside and outside factors have been identified. What is the next step to be taken towards completing the plan?

Develop business goals, objectives and related strategies

A facility's financial objectives could be achieved through operational strategies alone

False

Customer demographics is an internal factor.

False

The SWOT analysis would treat opportunities and threats as factors that usually can be controlled by the facility.

False

What information should form the basis of a golf shop's 12-month operating budget?

Figures from forecasts, breaking the income and expense categories into finer and more detailed elements. Performance history.

1. A golf professional is purchasing a golf course. The business plan he presented to his banker included his history of successfully operating similar facilities, budget projections for the first five years under his management, and objectives and strategies for reaching his goals. The banker rejected his loan application because of missing information. What important element is missing from the business plan?

He is missing the mission and vision statement

What is one of the techniques used to validate assumptions?

Historical review, expert review, scenarios and sensitivity analysis

Who should provide direction for creating the business plan at a golf operation?

Key Stakeholders

How might revenues be affected at a nearby daily fee course if the local tire plant has major layoffs?

Less golfers coming to a course

You are concerned about a decline in business growth. What method would be most effective in portraying your overall financial history?

Linear Trend Analysis

What is the process called when the manager reviews total rounds to determine who is playing and when?

Prepare Financial forecasts and budgets, Learning outcome, historical reviews, market analysis, assessing the current state of the business

What is an example of a financial strategy?

Reducing operating expenses without changing operational procedures

Next year you will be replacing a long-time golf shop employee with a new assistant who has considerable sales experience and selling skills. You will be paying this new staff member a higher salary. What is a reasonable assumption for you to make?

The golf shop will have to make up for the higher salary and losing the experience of the long-time employee

What is the definition of the "cost of goods sold?"

The value of cost of the merchandise sold to customers during each month, including the cost of lost, stolen or damaged goods.

The following agenda was part of a golf range business plan: "Purchase 175 dozen new range balls and rotate usage three times a year. Who: Head Professional. When: End of First Quarter. Cost: $1500." According to the Business Planning course, describe the business plan component represented by this statement?

This statement reflects the Operational Strategy because it will affect day-to-day work of the facility and staff

What would be the most appropriate initial response to facility income not meeting projections?

To explain what strategies you ahi win place to achieve your goals and objectives to get back on track

What method do managers use to increase their knowledge of financial performance and controls?

Track facilities performance using a point of sale system

A yield analysis is used to compile a facility's historical data on the number of rounds played.

True

Assumptions are necessary for forecasting numbers

True

Calculating yield involves knowing the relationship between the amount utilized and the amount available.

True

Gross profit is what remains after calculating the difference between revenue and cost of goods.

True

Raising or lowering green fees is a reasonable response to an underperforming budget.

True

Revising forecasts and budgets is one way to keep a business solvent in the event of unforeseen external changes.

True

The interpretation of quantitative data is less susceptible to differences of opinion than qualitative data.

True

The new manager of a ten-year-old private course, currently doing an average of 5,000 tournament rounds per year, proposes to increase tournament rounds by 50% by the end of next year. This proposal meets the criteria for an effective business objective as presented in the Business Planning Course Manual.

True

The results of a SWOT analysis could be sufficient justification for the abandonment of a core business function.

True

The utility of a business plan for managing day-to-day operations depends on the accuracy of your assumptions.

True

The utility of your business plan for managing day-to-day operations in a golf shop depends on your ability to manage internal factors.

True

Trends in local consumer spending would be most useful for evaluation a core business function

True