BM II 5.03

For financial information to be comparable, it must also be:

• consistent

• current

• digital

• private

A company looks at financial information and learns that it could save money by switching to a different Internet provider. This is an example of using financial information to:

• create a budget

• reduce expenses

• plan business expansion

• create a communication plan

A manager is most likely to use financial information when:

• establishing lines of authority within an organization

• researching the demographics of a new target market

• deciding if resources are available to fund a new project

• calculating the number of on the job injuries in the past year

When a business decides to pay a loan off early due to a cash surplus, how is this business using financial information?

• to manage debt

• to increase sales

• to create budgets

• to make purchases

What types of financial information are most useful to businesses?

• vague and logical

• sensitive and external

• transferable and creative

• timely and understandable

Which is a way that businesses can use financial information?

• to identify trends

• to conduct focus groups

• to select selling strategies

• to create an economic system

To develop realistic budgets, existing businesses usually base their estimates on:

• governmental information.

• competitors' activities.

• past performance.

• industry data.

Which is a factor that might cause a business to adjust its budget figures?

• local elections

• economic trends

• sales procedures

• operating policies

What is the relationship between a business’s goals and its budget?

• Goals are established after the budget so that they are realistic.

• Goals state the big picture and are unrelated to a detailed budget.

• Budgets reflect real business activity while goals are usually unrealistic.

• Budgets translate a business’s goals into actual means for accomplishing them.

The owners of C&G Auto regularly review their budget to determine whether they are:

• offering loans to employees.

• paying interest to customers.

• following their financial plans.

• receiving discounts from vendors.