Financial Analysis for Entrepreneurs

An understanding of financial concepts will help entrepreneurs:  

• control business expenses.
• recruit better employees.

What could happen to the business if the entrepreneur does not act ethically in all areas of the business, particularly in finance?

• The business would likely increase customer satisfaction and customer retention.
• The business would likely experience legal consequences and closure of the business. 

Some businesses can be started on a shoestring budget, while others may require considerable investment in inventory or equipment.

• True
• False

Every business has the same specific cash needs regardless of the stage of development of that business.

• True
• False

When it comes to money and the cost of starting a new business, the entrepreneur should plan for the unexpected.

• True
• False

In order to determine startup costs, the entrepreneur must first identify all:

• expenses 
• suppliers
• competitors
• profits

These are long-term investments in land, buildings, and equipment.

• Operating Expenses
• Capital Expenses

The costs of day-to-day operations. These include wages, utilities, insurance, supplies, and advertising.

• Operating Expenses           
• Capital Expenses

This is a budget that projects income and expenses from the beginning of a new business until it becomes profitable.

• Start-Up Budget
• Sales Budget

The small business owner's personal financial contribution to the business.

• Debt Capital
• Equity Capital