MGT 4475
The capabilities and skills of the founder or employees are
Intangible assets
The process of generating ideas should occur in a(n) ________ environment, rather than a(n) ________ environment.
Interactive; liner
When defining potential customers, an owner must
define a specified radius around the business
_________ demonstrates how easy it is for a customer to switch to substitutes
elasticity of demand
James has the benefit of gaining customer loyalty by being the first company to bring out a new gourmet burger. This is a form of:
First-moved advantage
Features of the business that remain largely static, dealing changes in productivity levels
Fixed assets
What are the two types of partnerships?
General and limited
Company analysis should go from
General to specific
These funds require no repayment
Grants
A small business owner can make decisions more quickly than a big business because
The decision make is both the owner and the manager of the business
John needs to lease a van for his flower company. This is an example of:
An asset lease
Some communities offer facilities that house new businesses and provide resources for them. These are called:
Incubators
If a company's current ratio is just over 1.0, it has enough money to meet how much of the short term obligations?
100%
The Civil Rights Act of 1964 applies to all firms with at least how many employees?
15
As a rule of thumb, how much of a new company's equity does the prospective owner need to have in hand before starting it?
150%
On the balance sheet, assets minus liabilities equals
Zero
Refusing a job to a pregnant woman, based on her status as such, violates which of the following laws?
Civil Rights Act of 1964
How should a company measure financial performance?
Concentrate efforts in areas that are extraordinary
How often should an entrepreneur update a critical-path chart?
Constantly
What kind of sales force is actually a company to which a business outsourced to find customers?
Contract sales force
A firm that builds its capacity to operate at a lower cost per unit of product or service than most of its competitors is a
Cost leader
What are the three sources of strategic advantage developed by Michael Porter?
Cost leadership, differentiation, and focus
Which of the following is a technique for arranging activities based on their mutual dependence?
Critical-path chart
Easily convertible to cash:
Current assets
Once a business is broadly defined, the next step is to
Define a narrow group of customers
Accounting system that recognizes expenses when due and revenues when due
Accrual-based
Measure of the efficiency with which a company can handle its resources
Activity ratio
A small business owner decides to take a cheaper flight to go to his yearly conference instead of an alternative flight that arrived at a better time. This decision reflects what one would expect under:
Agency theory
Individuals make decisions that maximize their own individual benefits according to
Agency theory
Logically, in the absence of innovation, a single firm should eventually produce 100 percent of a given product, due to its
Economies of scale
Established businesses are often willing to make what kind of investment in start-up firms?
Equity
Owners investment in their own firms
Equity
Type of funds received in exchange for some percentage of ownership in the company
Equity
First step in generating a cash flow statement
Estimating expenses
Felicia, an entrepreneur, is unable to leave her business due to the amount of money that she has invested in it. This limitation is a(n):
Exit barrier
What should a just-in-time inventory system do to your data management routine?
Facilitate data interpretation
Which of the following laws specifically applies to companies with 15 or more employees?
Americans with Disabilities Act
In a sole proprietorship or a partnership, business debts
Are the owner's responsibility
A bank provides John money to purchase a hamburger maker, which he needs for his business. This is an example of:
Asset-based lending
In a small business, that provides a service, careful pricing may serve to
Balance customer flow
Summary of assets and liabilities
Balance sheet
The process of _______ refers to working with and learning from a company outside of your industry, which has a skill that is critical to your firms operation.
Benchmarking
Mark brings his friends together to generate ideas on his new business. Mark will identify his skills and then ask his friends to generate a list of business ideas that he might start. This refers to the process of
Brainstorming
What term describes a new business that has reached a level at which revenue is sufficient to cover expenses?
Break-even point
The business owner should contact vendors to ask about payment terms when developing a:
Cash flow projection
Measure of a firms indebtedbess
Leverage ratios
Remaining margin after considering all obligations and expenses
Net profit margin
When small businesses compete with large firms, a significant disadvantage is
Operating at a cost level
Same as earnings before interest and taxes (EBIT)
Operating profit margin
The only category of activity in new ventures
Operations
Which of these is a type of analysis that compares trends or conditions in the marketplace against one's own ability to take advantage of them?
Opportunity analysis
What develops in large companies that have excess resources such as equipment and employees?
Organizational slack
Approximately what percentage of US millionaires rely on self-employment for their wealth?
Over 65%
Pricing something that ends in 99 cents makes a big difference in the buying of a product due to consumer's
Perception
Pursuing a harvest plan for a small business means that the owner is
Planning to exit the small business
Which of the following is an example of a fragmented market: pool-building companies, fast-food restaurants, hardware stores, or department stores?
Pool-building companies
In an interview, an interviewer can reasonably ask questions about
Prior convictions
Financial statement that summarizes the revenue, costs, and expenses incurred during a specific period of time
Profit-and-loss statement
Focus of an income statement
Profits
Another name for the acid test ratio
Quick ratio
Advantage of factoring
Quick way to raise funds needed
Basis for assessing various aspects of the health of the company
Ratio analysis
Measure of how effective a firms resources are in producing value
Return on assets
Dennis's stockholders want him to constantly improve his _________ ration, because this will improve the future value of their investment in the firm
Return on equity
Which of the following terms refers to a set amount of compensation for a given period despite changes in actual time worked?
Salary
What kind of investment is debt?
Secured
Analysis of the best-and-worst case financial scenarios
Sensitivity analysis
Competitors will often ______ their knowledge if they see your business is falling outside their domain of direct competition
Share
Until the mid-1880s, almost all businesses were
Small
What term describes individuals or other organizations that have a direct or indirect interest in the success of a business?
Stakeholders
What is a small retail center located on a major road?
Strip shopping center
Jane has developed a special Italian sauce for pizza. The sauce cannot be easily copied. This is a(n):
Sustainable competitive advantage
Items that include equipment and location are
Tangible assets
How do individual consumers generally feel about changing their providers of goods or services?
They are reluctant to do so
What is a threat to the new business in financing its growth, including high development costs?
Threat to operational financing
What is a threat to the success of a new business as a function of the business owners ability to establish and maintain a high-margin product or service?
Threat to profit margin
What is a threat to the success of a business in terms of its opportunity to sell enough customers and to obtain repeat business?
Threat to sales generation scheme
Indicator of the number of times that a business could repay the current interest owed on its debt
Times-interest-earned ratio
As a rule of thumb, potential business owners should ideally be able to convey their business ideas to prospective investors or lenders in _____ minutes.
Two
What term describes Walmart's ability to purchase more advertising space at a lower cost per ad?
Volume excess
The largest group of new business owners in the U.S. is:
Women
What kind of insurance covers workers who sustain injuries on the job?
Workers' compensation
Years ago, economists mistakenly predicted that small businesses would:
become less common as large businesses proliferated