BUS 220

a,b,c

Silicon Valley and Boston's 128 corridor are well known for: a) providing a basis to the area's economic vitality. b) generating new employment with entrepreneurial ventures. c) providing a growing tax revenue base. d) providing economies of scale to the region.

(current assets - inventory) / current liabilities

quick ratio (acid test) =

contract sales

A ___________ _________ force provides independent salespeople with a wide variety of experiences and contacts on a contract basis.

local, federal, and state authorities

A business with employees will be required to calculate and deduct various payroll taxes for:

entrepreneurial businesses' resources are more constrained than those of venture capital-backed businesses.

A difference between entrepreneurial businesses and venture capital-backed firms is that?

a,c

A key aspect of how the funding will be used is found in the information provided by the business, and that comes from: a) the data flow management. b) the opportunity analysis c) the accounting system d) the inventory control system

triple

A poorly performing employee is said to have a _________ impact on the entrepreneurial firm.

S

An advantage of the Subchapter ___ Corporation is that it allows the owners to report their income or losses on their personal income tax returns, thus avoiding double taxation.

measurement

Developing a ___________________ focus helps entrepreneurs fulfill their strategic goals.

cash flow; profitability.

Entrepreneurs of a new firm should focus on the viability of the firm; the firm's viability will be decided by ___________, not ___________.

a

Financial information needed to calculate debt-to-equity and debt-to-assets comes from the ____________. a) balance sheet b) cash flow statement c)income statement

a,c

Identify the features of circumstance motivators. a) They tend to result in more of a defensive positioning. b) They result in life-altering moves for entrepreneurs, which can have a big potential downside. c) They result from environmental changes. d) They result from individuals themselves.

a,b

Identify the reasons individuals can become frustrated with working in a large corporation. a) Lack of promotion opportunities b) Inflexibility of large corporations in dealing with the needs of an individual's family and children c) Lack of corporate citizenship behavior d) Inability of large corporations in pursuing business opportunities in small markets

accounting

The ____________ system of a firm is a powerful asset that should be used as a fine-grained tool to provide data about when and how inventory is needed.

funding

The accounting system and the data flow management provide information on how the ___________ will be used by the business.

Account receivable turnover

What = (credit sales)/(accounts receivable)

-Return on assets -Return on equity

What two profitability ratios are calculated using the income statement and balance sheet?

balance sheet

What financial document focuses solely on the business's assets and liabilities?

Par value

What is the initial value at which the firm's shares are offered?

1. Income 2. Expense 3. Asset

What is the order of the categories of accounts in a chart of accounts. Expense, Asset, Income

Debt-to-equity ratio

What ratio = (total liabilities)/(total assets - total liabilities)

debt-to-assets ratio

What ratio measures the percentage of the firm's assets that are owned by creditors?

Leverage ratios

What ratios are used to examine the relative level of a firm's indebtedness?

Leverage ratios

What ratios is used to measure the relative level of a firm's indebtedness?

Activity Ratios

What ratios measures the efficiency with which an entrepreneur is handling the business's resources?

World War II

What significant, historical event marked the beginning of the decline of entrepreneurial businesses in the United States?

accounting system and the data flow management

What two tools show where the funding is being used.

Sensitivity Analysis

What type of analysis is a chart using financial statements to create a pro forma projection based on a dramatic increase or decrease in sales, or the complication of a major change in the business?

Subchapter C Corporation

What type of business form: -considers the owners as employees and pays them salaries and bonuses -profits that are not paid out for such items as salaries are retained for future expansion

Including small increments of money regardless of the exact percentage of margin desired.

When establishing pricing, an entrepreneur of a new business should typically avoid ____________.

Limited

Which class of partner in a limited partnership is considered to be a passive investor and his or her liability is limited to his or her investment in the firm?

Subchapter C

Which form of incorporation is required to pay an income tax?

c,d,e

Which of the following are characteristics of venture capital-backed firms? a) They are generally free of any debts. b) They tend to restrict themselves to a single location after the initial investment. c) They either start or grow quickly to employ a relatively large number of employees. d) They are formed with a harvest plan in place. e) They have a developed organizational structure.

a,b

Which of the following are true about an entrepreneurial firm's pro forma income statement? a) It helps in understanding the business's overall cost picture. b) It focuses on profit rather than cash flow. c) It focuses on the flow of cash in and out of the business. d) It is a summary of the assets and liabilities of the business.

a

Which of the following can help manage the cash flow of a new entrepreneurial firm? a) The ability of the firm to barter for services b) The use of only liquid cash in paying expenses c) The choice of keeping the price of their product costant d) The ability of the firm to deny payments to their hourly employees

b) Network

Which of the following is NOT one of the three types of specific risks? a) Strategic b)Network c) Financial d) Market Retaliation

cost of goods sold / inventory

inventory turnover ratio =

bounded rationality

rational decision making that is constrained by the background and history of the person making the decision.

operating income / interest

times interest earned ratio =

net sales/fixed assets

total/fixed asset turnover ratio =

help one better understand one's traits and tendencies.

Personality tests can?

a,c

Identify the true statements about hypothesis-driven analysis for new businesses. a) The analysis uses the hypothesis that an entrepreneur has about what a customer really desires b) The analysis uses random sampling and short surveys c) The analysis is conducted in small batches d) The analysis uses the information gathered from asking customers

a,b

Identify the true statements about new businesses triggered by circumstance motivators. a) The staying power of these businesses is determined by other competing opportunities. b) They are opportunistic start-ups. c) The entrepreneurs starting such businesses usually plan for them over a long period. d) They are run by people who have a personal motivation.

The late 1970s to early 1980s

In what time period did the United States see a decline in large multinational firms and a rise of new opportunities for entrepreneurial businesses?

Net profit / Net sales

Net profit margin =

b

New business owners should ___________ to prevent a cash crunch. a) accurately forecast the business's profits. b) accurately forecast the business's cash flow c)focus on generating sales d) rely on bank loans

b

The financial analysis for a proposed business focuses on ___________. a) developing a series of financial reports for wither entrepreneurs or for investors over a past time period such as a month or a quarter. b) the business's ability to generate positive cash flow quickly.

False

True or False: A Subchapter C Corporation treats fringe benefits that are paid out as income for its employees.

False

True or False: To calculate the maximum amount to obtain in outside financing. It is advisable for an entrepreneur to calculate the entire cash flow projection by adding in all equity investments.

Inventory Turnover Rate

What = [cost of goods sold (income statement)]/[inventory(balance sheet)]

Return On Equity (ROE)

What = net profit / equity

Subchapter C Corporation

What business type has no limits on the number of shareholders that an organization can obtain?

a,d

Which of the following statements are true about the sensitivity analysis of a new business? a) It helps examine the responsiveness of the potential cash flow to dramatic changes in either revenue or cost stream. b) It focuses solely on the best-case, cash flow scenario. c) It keeps an entrepreneur away from having to make the judgement call on whether the business would survive the worst-case scenario. d) It should be conducted during the due diligence phase of studying a business idea.

They are often formed as high-tech ventures consisting of unique characteristics.

Which of the following statements is true of venture capital start-ups?

one-third

Women of color account for __________ of businesses headed by women.

Bonding

__________ insures businesses from damages caused by workers in the performance of their jobs.

credit sales / accounts receivable

accounts receivable turnover ratio =

current assets / current liabilities

current ratio =

total liabilities / total assets

debt-to-assets ratio =