Business Financial Planning Assessment

What is capital in the context of business?

• Money used only for daily operations

• Money needed to establish, operate, and expand a business

• Funds reserved exclusively for emergencies

• Money used only for purchasing inventory

Which type of budget describes the financial plan for ongoing operations of a business for a specific period?

• Cash budget

• Operating budget

• Start-up budget

• Reserve budget

What is the primary reason most small businesses fail in their first five years according to the SBA?

• Poor location choice

• Lack of customer interest

• Insufficient funding

• Poor marketing strategies

What is financial forecasting?

• Predicting stock market trends

• Calculating past expenses

• The process of estimating a business's operating capital

• Determining employee salaries

What is the formula for calculating profit?

• Assets minus Liabilities

• Revenue minus Assets

• Revenue minus Expenses

• Income minus Capital

What is payroll?

• A list of company assets

• The financial record of employee compensation, deductions, and net pay

• Monthly business expenses

• Record of inventory costs

What is direct deposit?

• Cash payment to employees

• A paper check payment system

• Electronic transfer of net pay into an employee's bank account

• Payment through company stock

Which of the following is NOT typically included in a start-up capital statement?

• Equipment costs

• Employee salaries for the first year

• Security deposits

• Five-year profit projections

What are financial records used for?

• Only tracking employee attendance

• Recording and analyzing business financial performance

• Storing customer information

• Marketing research

What document reports assets, liabilities, and equity?

• Income statement

• Cash flow statement

• Balance sheet

• Payroll record