Business Theme 2 - End of Theme Test

Which are sources of external finance.

• Bank loans, equity financing, and trade credit

• Internal cash reserves, retained earnings, and asset sales

• Government grants, subsidies, and tax incentives

• Personal savings, family loans, and crowdfunding

What are methods of finance?

• Equity financing, Debt financing, and Grants

• Only Equity financing

• Only Debt financing

• None of the above

Explain the implications of limited and unlimited liability.

• Limited liability means personal assets are protected; unlimited liability means personal assets are at risk.

• Limited liability means personal assets are at risk; unlimited liability means personal assets are protected.

• Both limited and unlimited liability mean personal assets are protected.

• Both limited and unlimited liability mean personal assets are at risk.

The relevance of a business plan in obtaining finance is:

• It is not necessary for obtaining finance.

• It helps in securing finance by outlining the business strategy and financial projections.

• It is only required for large businesses.

• It is only a formality and does not impact financing.

Interpret a simple cash-flow forecast and explain the calculations based on changes in the cash-flow variables.

• A cash-flow forecast is a financial statement that estimates the flow of cash in and out of a business over a specific period.

• A cash-flow forecast is a detailed report of past financial transactions.

• A cash-flow forecast is a tool used to measure the profitability of a business.

• A cash-flow forecast is a document that outlines the business's long-term financial goals.

What are the uses and limitations of a cash-flow forecast?

• A tool for predicting future financial liquidity and identifying potential shortfalls.

• A method to increase company profits directly.

• A strategy for reducing operational costs.

• A way to eliminate all financial risks.

Which of the following is not a source of external finance?

• Family and friends

• Banks

• Personal savings

• Business angels

The purpose of sales forecasts is to:

• Predict future sales and revenue

• Determine employee salaries

• Plan company picnics

• Design marketing logos

Which of the following is a factor affecting sales forecasts?

• Consumer trends

• Historical figures

• Margin of safety

• Variance analysis

Name one difficulty of sales forecasting.

• Lack of historical data

• Too much competition

• High employee turnover

• Inadequate marketing budget