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