Chapter 36 Marketing Applications

At the beginning of the year, a sporting goods store had $250,000 worth of inventory. The store's buyers purchased an additional $115,000 worth of inventory during the year. At year's end, the value of the inventory was $185,000. What was the store's cost of goods sold?

• $360,000

• $170,000

• $65,000

• $295,000

What document summarizes a loan applicant's assets and liabilities?

• personal financial statement

• credit report

• income statement

• business balance sheet

What monthly plan helps a business owner track when cash is expected to come in and when it would be paid out?

• balance sheet

• profit and loss statement

• cash flow statement

• projected income statement

If a company had a gross profit of $126,532 and net income from operations of $45,945, what was the total amount of its operating expenses?

• $80,587

• $105,587

• $54,687

• $60,857

Eduardo has assets of $145,000 and debts of $90,000. What is his net worth?

• $130,000

• $59,000

• $55,000

• $305,000

Banks look at the _________________ of a potential borrower because they can be sold if necessary to pay off a loan.

• assets

• credit

• variable

• liquidity

• equity

Besides considering a borrower's assets, or collateral, and prospects for a successful business, lenders also examine a borrower's _______________ history.

• assets

• credit

• variable

• liquidity

• equity

____________________ expenses include a business's operating expenses, such as advertising costs and utility expenses.

• assets

• credit

• variable

• liquidity

• equity

Lenders use different types of ____________________ ratios to determine a business's ability to meet its current debts.

• assets

• credit

• variable

• liquidity

• equity

Net worth or ____________________ is calculated on a balance sheet.

• assets

• credit

• variable

• liquidity

• equity