Entrepreneuirship exam 2

When it comes to sharing with an investor the most important part of the business plan?

Executive summary (because investors don’t have time to read the long business plan)

According to the textbook what helps make sense of all the financials of the business.

Ratio analysis (we compare ourselves to other ppl in the industry which could help determine how we are doing)

Why does an entrepreneur write a business plan?

For investors and employees.

What section of the business explains how profits are made?

Economies of the business (revenue drivers and expenses)

Which is not a part of a partnership.

Partial(made up)

A business plan should take many weeks to write properly.

True

When analyzing the market, you should consider a competitive analysis.

True

What type of business needs articles and corporation.

C-Corporation

What is an ethical dilemma?

A situation that benefits you not the company.

What document describes the split of equity?

Founders agreement

A code of behavior is a written policy a company has on social issues?

False(code of conduct)

According to the book what is the best way to build a strong ethical culture

Lead by example

Limited partnerships include two classes of owners general and limited.

True

What is not a type of corporation?

T-corp

The ability to meet short term financial obligations.

Liquidity

What is not a fixed asset?

Raw materials

What is a PNL statement (Profit and loss)

Income Statement (easiest to read)

Cash is considered

A current asset

A budget is an itemized forecast of a company’s income and expenses.

True

Proforma financial statements are required by the SCC

False

Net income divided by net sales =?

A companys profit margin

Starting a business as in induvial has an advantage over starting one with a team.

False

When new employees cannot adjust quickly enough to their new roles.

Liability of newness

A corporation requires.

A board of directors(corporation)

Heterogeneous what are the 2 types?

Are diverse with abilities and experiences(skill sets)

A board of directors has 3 formal responsibilities.

Appoint officer to the firm, have to oversee the affairs of the corporation, if there are any dividends that are going out they are the ones who look into it.

When you have a high-quality or well know person on your board of directors it is known as signaling.

True

Who has legally responsibility over the business.

Board of directors