Marketing and Sales Chapter 20

The basic financial equation is ____________

• Costs - Revenue = Profit or Loss

• Revenue - Costs = Profit or Loss

• Profit or Loss - Costs = Revenue

• Costs - Profit or Loss = Revenue

Each time marketers consider changes in the marketing mix, they need to study the costs of those changes and predict the effect of the changes on sales

• True

• False

Which of the following would NOT be considered a short-term expense?

• supplies

• a new fleet of delivery trucks

• the monthly utility bill

• salaries and wages

Most long-term business costs apply to production or operations rather than marketing

• True

• False

Long-term expenses are ____________

• often financed with credit by the seller

• often financed through a bank or other financial institutions

• often paid in full at the time of purchase

• usually paid within one or a few months

Because conditions can change, long-range forecasts usually are not as accurate as shorter forecasts

• True

• False

An income statement can be used to analyze the profitability of an entire company, but not to analyze individual operating units within the company

• True

• False

The operating tool that describes the type and amount of assets, liabilities, and owner's equity in a business on a specified date is the ___________

• balance sheet

• income statement

• financial forecast

• budget

What are financial plans most commonly based on?

• marketing plan

• marketing-related data

• industry performance

• past performance

Which of these is the most effective method to develop accurate forecasts and budgets?

• comparing the forecasts and budgets from previous years with the actual results

• looking for data that help to predict performance

• calculating the costs of performing the necessary marketing tasks

• using information from comparable businesses and markets