Entrepreneurial Management Chapter 8/9

What is the equation used in a Balance Sheet?

• Assets = Liabilities + Equity
• Assets = Revenue - Expenses
• Cash Flow = Inflows - Outflows
• Net Income = Revenue - Expenses
• None of the above

Which statement shows a company’s revenues and expenses?

• Balance Sheet
• Income Statement
• Cash Flow Statement
• Statement of Changes in Equity
• None of the above

What does the Cash Flow Statement report?

• Assets and Liabilities
• Revenues and Expenses
• Cash generated and used in a period
• Changes in Equity
• None of the above

What does a positive Net Present Value (NPV) indicate?

• Project’s earnings are less than costs
• Project’s earnings equal the costs
• Project’s earnings exceed the costs
• Project is not profitable
• None of the above

What is the Quick Ratio?

• Current Assets / Current Liabilities
• (Current Assets - Inventory) / Liabilities
• Revenue / Expenses
• Gross Profit / Revenue
• None of the above

Which ratio measures the company’s ability to meet short-term obligations?

• Current Ratio
• Quick Ratio
• Debt-to-Equity Ratio
• Inventory Turnover Ratio
• None of the above

What does the Gross Profit Margin indicate?

• Percentage of revenue that is profit
• Percentage of revenue that exceeds COGS
• Company’s ability to meet interest obligations
• Company’s financial leverage
• None of the above

What is the formula for Return on Assets (ROA)?

• Net Income / Total Assets
• Total Assets / Net Income
• Net Income / Shareholders' Equity
• Total Assets / Liabilities
• None of the above

What is the Debt-to-Equity Ratio used for?

• Evaluating liquidity
• Assessing profitability
• Comparing liabilities to equity
• Measuring asset utilization
• None of the above

Which ratio is a measure of operational efficiency?

• Current Ratio
• Return on Equity
• Interest Coverage Ratio
• Inventory Turnover Ratio
• None of the above