Entrepreneurial Capital & Ratio Analysis Quiz

An entrepreneur secures capital by issuing equity instead of debt. What is the primary reason for this preference?

• To avoid investor dilution

• To maintain full control

• To avoid interest payments and improve liquidity

• To reduce tax obligations

A business has a Gross Profit of ₱400,000 and Revenue of ₱1,000,000. What is the Gross Profit Margin?

• 25%

• 30%

• 40%

• 60%

A company has Net Income of ₱100,000 and Total Assets of ₱1,000,000. What is its Return on Total Assets (ROTA)?

• 1%

• 5%

• 10%

• 15%

Which of the following is a key limitation of using Net Profit Margin as a sole performance indicator?

• It ignores direct costs

• It includes interest but excludes taxes

• It does not account for asset efficiency

• It is only applicable to service-based businesses

When calculating Return on Total Assets, which two elements are essential?

• Revenue and Operating Expenses

• Net Income and Total Assets

• Net Sales and Gross Margin

• Current Liabilities and Net Profit

Which of the following tools is LEAST likely to be used in project cost estimation?

• Expert Judgment

• Analogous Estimating

• Monte Carlo Simulation

• Brainstorming

In self-imposed budgeting, who initiates the budget proposals?

• Top management

• Budget committee

• Middle management and employees

• External consultants

What is the most appropriate budgeting period for a seasonal retail business?

• Monthly

• Quarterly

• Bi-annually

• Annually

Which of the following is TRUE about master budgets?

• They exclude cash budgeting

• They are flexible and adjusted daily

• They integrate operational and financial planning

• They are unnecessary in self-imposed budgeting systems

One major benefit of budgeting is:

• Increased discretionary spending

• Guaranteeing revenue targets

• Coordinating the activities of the entire organization

• Avoiding the need for variance analysis