Strategic Management Quiz 8
Andrew invested $200,000 in the shares of a company. At the end of a year, he had earned $7,000 as dividends on his shares along with a $1,000 appreciation in the overall value of his shares. However, if Andrew had invested the same amount on an asset, like gold, the appreciation in its value would have earned him $10,000 at the end of the year. In this scenario, which of the following is Andrew's opportunity cost?
$10,000
Find the calculation formula for the following financial ratios:
- *current ratio:* current asset/current liabilities - *debt ratio:* total liabilities/total assets - *operating profit margin:* operating profit/net sales*100 - *total assets turnover:* net sales/average total assets - *gross profit margin:* sales-COGS/sales - *interest coverage:* EBIT/interest expense - *net profit margin:* NI/revenue*100
How does a sustainable strategy typically help a firm?
It helps the firm achieve positive results along the social and ecological dimensions.
which of the following describes a peer to peer technique
a company matches an individual with a cleaning service
the tenet behind the triple bottom line is that
a firm should achieve positive results along the economic, social, and ecological dimensions to gain a sustainable strategy.
the best measure of a company's ability to meet imminent financial obligations
current ratio
Take advantage of the price flexibility inherent in the wholesale model, Amazon offered many books (esp. ebooks) below the cost that other retailers had to pay to publishers. By doing this, Amazon showed how business models can be affected through
disruption
The "balanced scorecard" provides top managers with a __________ view of the business.`
fast but comprehensive
Photohome is a file hosting service that allows users to store up to 5GB of data with no restrictions or charges. However, users have to pay a fee for advanced features on the cloud storage system and additional storage space. Which of the following business models does this best illustrate?
freemium
which of the following questions challenges managers to come up with strategic objectives that ensure future competitiveness
how do we create value
which of the following is an advantage of applying the economic value creation perspective to assess a firm's performance
in economic value perspective, analysts not only consider historical costs, but also opportunity costs
Kerry the Kangaroo Inc. specializes in producing and selling a stuffed kangaroo named Kerry. Although the stuffed kangaroo has sold well, the clothes that can be bought to dress the kangaroo have not sold as well as expected. As a result, Kerry the Kangaroo has warehouses full of hats, pants, sweaters, and shoes to dress Kerry. This firm used a _____ to determine how much of its capital is tied up in these accessory items.
inventory turnover
which of the following is an advantage of the balanced-scorecard
it allows managers to translate a firm's vision into measurable operational goals
which of the following is true of the balanced-scorecard
it attempts to provide a holistic perspective on firm performance
which of the following is not an advantage of the balanced- scorecard approach to assess firm performance
it is a tool which can be effectively used by managers for both strategic implementation & strategic formulation
Which of the following financial ratios is used to measure a company's ability to meet its short-term financial obligations?
liquidity ratios
Free Spirit Communications Inc. is a cellular service provider that charges its customers $1 for three hours of talk time. So, if a customer's talk time for a month is 60 hours, the company charges him or her $20 at the end of the month. Which of the following business models does this best illustrate?
pay as you go
TravelEasy Inc. is a car rental business that charges customers based on how many miles they put on a car on a daily basis. As a result, a person who uses a car to travel from Chicago to Denver during a week is charged much more than a person who uses a car only to travel 1 mile to the grocery store 6 times a week
pay as you go
Airbnb rents spaces that previously would have been unused to generate revenue, while also dramatically increasing the potential amount of accommodation space in the 191 countries. This business uses a _____ technique.
peer to peer
True Vibgyor Inc. sells its e-book readers at the cost price of $15 each. However, the company makes its profits when users have to download or buy books online. Which of the following business models is True Vibgyor implementing?
razor razor blade
Smart Feet Inc. produces shoes that are better quality and cost more to make than the shoes of its competitors. Smart Feet realizes that there will be a large difference between the cost to produce the shoes and the consumer's willingness to pay for them. Even so, Smart Feet decides to charge the same price as its competitors. Which of the following will most likely be the result of this action?
smart feet will gain market share
Best Fit Club, a chain of gyms and spas, requires its customers to pay a quarterly or an annual fee to use its services. Irrespective of whether they frequently use the services during the payment period or not, members have to pay in advance. Which of the following business models does this best illustrate?
subscription based
which of the following is an advantage of a triple bottom line approach
the approach takes an integrative & holistic view in assessing a company's performance
Ratios that reflect whether or not a firm is efficiently using its resources are known as
turnover ratios
Hugo Books Inc. is a retailer that buys books at a fixed price from publishers. Recently, Hugo offered a deal in which customers could buy a package of three mystery books at a discounted rate. Which of the following business models has Hugo Books combined?
wholesale and bundling