Business Planning and Employee Relations Quiz
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A business plan is best described as a(n) ________.

  • narrative description of a new business (correct)
  • budget
  • marketing initiative
  • contract

    • The well-known company discussed in the Savvy Entrepreneurial Firm feature of chapter 6 that changed significantly from its original business plan is ________.

  • Netflix
  • Amazon
  • Foursquare
  • Instagram (correct)

    • What is the main purpose inside the firm for writing a business plan?

  • The plan recruits a strong management team.
  • The plan helps the company develop a 'road map' to follow to execute its strategies. (correct)
  • The plan establishes a strong social media presence.
  • The plan introduces potential investors and other stakeholders to the business opportunity.

    • A(n) ________ business plan, which is typically 25 to 35 pages long, works best for new ventures who are at the point where they need funding or financing.

    <p>full</p> Signup and view all the answers

    Which type of business plan primarily serves an internal audience?

    <p>Operational business plan</p> Signup and view all the answers

    The ________ is the first section of the business plan.

    <p>executive summary</p> Signup and view all the answers

    The ________ section of the business plan requires that an entrepreneur identify their firm's major revenue drivers.

    <p>economics of the business</p> Signup and view all the answers

    Which section of the business plan describes the geographic location of the business?

    <p>Operations plan</p> Signup and view all the answers

    What are the three primary reasons startups need funding?

    <p>Cash flow challenges, capital investments, and lengthy product development cycles</p> Signup and view all the answers

    What does equity financing involve?

    <p>Exchanging partial ownership in a firm, usually in the form of stock, for funding</p> Signup and view all the answers

    Where does the seed money that typically starts a startup usually come from?

    <p>The founders' own pockets</p> Signup and view all the answers

    What is the initial public offering commonly referred to as?

    <p>Initial public offering</p> Signup and view all the answers

    The SBIR and STTR programs are offered by which organization?

    <p>The National Science Foundation</p> Signup and view all the answers

    What type of program is Techstars?

    <p>Startup accelerator program</p> Signup and view all the answers

    How long is the typical investment horizon for equity investors?

    <p>5 to 8 years</p> Signup and view all the answers

    Debt financing typically involves which of the following?

    <p>Getting a loan or selling corporate bonds</p> Signup and view all the answers

    What type of business plan should Sarah write at this point?

    <p>Summary business plan</p> Signup and view all the answers

    How many pages is a summary business plan typically?

    <p>10 to 15</p> Signup and view all the answers

    Which company is known for significantly changing its original business plan?

    <p>Instagram</p> Signup and view all the answers

    What does an organizational chart depict?

    <p>Authority and responsibility distribution</p> Signup and view all the answers

    The gross margin is also known as what?

    <p>Contribution margin</p> Signup and view all the answers

    What is due diligence in terms of investment?

    <p>The process investors undergo after preliminary commitment</p> Signup and view all the answers

    Which section of the business plan typically includes the mission statement?

    <p>Company description</p> Signup and view all the answers

    A clearly written business plan is important because it serves what purpose?

    <p>Helps both management and employees understand goals</p> Signup and view all the answers

    In which section of the business plan would key partnerships be discussed?

    <p>Company description</p> Signup and view all the answers

    In the context of a firm's statement of cash flows, which activities are included in financing?

    <p>Cash raised by selling stock or borrowing money.</p> Signup and view all the answers

    Which of the following statements about writing a business plan is NOT recommended?

    <p>Should follow an unconventional structure to impress</p> Signup and view all the answers

    What is a recommended inclusion when sending a business plan to potential investors?

    <p>A cover letter</p> Signup and view all the answers

    What does a firm's income statement reflect?

    <p>All revenues and expenses over a specified period.</p> Signup and view all the answers

    The noteworthy events of registering a company name are examples of what?

    <p>Milestones</p> Signup and view all the answers

    Which term describes a company's ability to meet its short-term financial obligations?

    <p>Liquidity</p> Signup and view all the answers

    What does efficiency measure in terms of a firm's operations?

    <p>How productively a firm utilizes its assets.</p> Signup and view all the answers

    What is the perception of U.S. respondents regarding retaliation for reporting misconduct according to recent surveys?

    <p>79 percent</p> Signup and view all the answers

    Which statement about balance sheets is true?

    <p>Assets are listed based on their historical cost.</p> Signup and view all the answers

    What is the main purpose of a pro forma statement of cash flows?

    <p>To project cash availability for firm needs.</p> Signup and view all the answers

    In forecasting its cost of sales, which method is most commonly used?

    <p>Percent-of-sales method</p> Signup and view all the answers

    What type of financial statements are primarily historical in nature?

    <p>Historical statements</p> Signup and view all the answers

    The term 'net income divided by net sales' is used to calculate which metric?

    <p>Profit margin</p> Signup and view all the answers

    Which term describes the overall health of a firm's financial structure related to its debt-to-equity ratio?

    <p>Stability</p> Signup and view all the answers

    Which statement correctly describes the outcome of low turnaround times in airlines?

    <p>Enhances efficiency of asset utilization</p> Signup and view all the answers

    What is a significant measure of a firm's effectiveness?

    <p>Utilization of resources for maximum output</p> Signup and view all the answers

    Which approach is utilized when a firm determines expense items will grow at the same rate as sales?

    <p>Constant ratio method of forecasting</p> Signup and view all the answers

    Which of the following is an example of a current asset on the balance sheet?

    <p>Accounts receivable</p> Signup and view all the answers

    What type of agreement is required by Harley Davidson for employees leaving the company to avoid working with competitors for two years?

    <p>noncompete</p> Signup and view all the answers

    What is a common business structure in real estate development and oil exploration?

    <p>Limited partnerships</p> Signup and view all the answers

    Which of the following is NOT a requirement for a business to qualify as a subchapter S corporation?

    <p>The business must be a subsidiary of another corporation</p> Signup and view all the answers

    What was the reason Graza was able to recover from their product disaster involving holiday olive oil?

    <p>The sincerity of the founder's personal apologies</p> Signup and view all the answers

    What are the two primary classes of stock issued by most C corporations?

    <p>Common and preferred</p> Signup and view all the answers

    Which term describes the process in which an impartial third party helps resolve a dispute?

    <p>Mediation</p> Signup and view all the answers

    Preferred stockholders typically have what type of rights?

    <p>Higher dividend priority</p> Signup and view all the answers

    What distinguishes a limited partnership from a general partnership?

    <p>Limited partnerships have at least two types of owners</p> Signup and view all the answers

    Which document must be filed to formally create a corporation?

    <p>Articles of incorporation</p> Signup and view all the answers

    What is NOT considered an advantage of a general partnership?

    <p>Low liquidity of investment</p> Signup and view all the answers

    C corporations are typically categorized into which two types?

    <p>C and subchapter S</p> Signup and view all the answers

    What type of financial statements are typically prepared for future forecasting?

    <p>Pro forma statements</p> Signup and view all the answers

    The income statement primarily shows the firm's:

    <p>Revenue and expenses</p> Signup and view all the answers

    What classification does working capital fall under in a firm's financial metrics?

    <p>Liquid assets</p> Signup and view all the answers

    Which of the following is typically NOT included in a founders' agreement for a firm?

    <p>Recommended attorney(s)</p> Signup and view all the answers

    Which type of partnership is commonly used in real estate development and oil and gas exploration?

    <p>Limited partnerships</p> Signup and view all the answers

    Steven Diaz signed an agreement at Harley Davidson stating he cannot work for competitors for two years. This is called a ________ agreement.

    <p>noncompetition</p> Signup and view all the answers

    Which statement about limited partnerships is NOT correct?

    <p>Both the limited partners and the general partners are equally responsible for the debts.</p> Signup and view all the answers

    What factor contributed to the recovery of Graza during their holiday disaster?

    <p>Sincerity of the founder's apology</p> Signup and view all the answers

    Which of the following statements regarding common stock is incorrect?

    <p>Common stock is narrower than preferred stock.</p> Signup and view all the answers

    The situation where a court overlooks a corporation's liability protection is called ________.

    <p>piercing the corporate veil</p> Signup and view all the answers

    A situation that benefits oneself but may be unethical is termed a(n) ________.

    <p>ethical quandary</p> Signup and view all the answers

    Which statement is true regarding common and preferred stock?

    <p>Common stock is issued more broadly than preferred stock.</p> Signup and view all the answers

    In some states, businesses that plan to operate under a different name require a(n) ________ permit.

    <p>fictitious business name</p> Signup and view all the answers

    What is a disadvantage of a C Corporation?

    <p>Income is subject to double taxation.</p> Signup and view all the answers

    Corporations that trade on organized exchanges, like NASDAQ, are known as ________ corporations.

    <p>public</p> Signup and view all the answers

    Partnerships are organized as either ________ or ________ partnerships.

    <p>general; limited</p> Signup and view all the answers

    A typical startup's stock vesting schedule lasts ________ and includes a 12-month cliff.

    <p>36 to 48 months</p> Signup and view all the answers

    Which agreement sets forth the rights and duties of general and limited partners?

    <p>limited partnership agreement</p> Signup and view all the answers

    Which type of funding occurs early in a venture's life for prototype development?

    <p>Seed</p> Signup and view all the answers

    Venture capital firms are often structured as ________.

    <p>Limited partnerships</p> Signup and view all the answers

    The Partnering for Success feature in chapter 10 describes Techstars as a(n) ________.

    <p>Startup accelerator program</p> Signup and view all the answers

    The two types of crowdfunding sites are ________.

    <p>Rewards-based and equity-based</p> Signup and view all the answers

    Equity financing involves ________.

    <p>Exchanging partial ownership in a firm for funding</p> Signup and view all the answers

    The term for funding received by a startup after the initial venture capital investment is ________.

    <p>Follow-on funding</p> Signup and view all the answers

    Which statement is NOT correct about grant programs?

    <p>There are limited organizations offering grants</p> Signup and view all the answers

    The primary disadvantage of equity funding is that ________.

    <p>The firm's owners relinquish part of their ownership</p> Signup and view all the answers

    The SBIR and STTR programs are available from ________.

    <p>National Science Foundation</p> Signup and view all the answers

    Debt financing primarily involves ________.

    <p>Getting a loan or selling corporate bonds</p> Signup and view all the answers

    Equity investors generally expect a return on investment within ________ years.

    <p>5 to 8</p> Signup and view all the answers

    The term 'Love money' refers to capital received from ________.

    <p>Friends and family</p> Signup and view all the answers

    The term describing limited partnerships of money managers who invest in startups is ________.

    <p>Venture capital firms</p> Signup and view all the answers

    Which statement is NOT correct regarding business angels?

    <p>Business angels fund later stages of a company</p> Signup and view all the answers

    The major advantage of leasing compared to purchasing assets is that ________.

    <p>It provides asset use with little or no down payment</p> Signup and view all the answers

    Study Notes

    Quiz 6 Study Notes

    • Business Plan Definition: A narrative description of a new business.
    • Savvy Entrepreneurial Firm Change: Netflix.
    • Internal Business Plan Purpose: To develop a roadmap for executing strategies.
    • Full Business Plan Length: 25 to 35 pages.
    • Internal Business Plan Type: Operational Business Plan.
    • First Business Plan Section: Executive Summary.
    • Revenue Driver Section: Economics of the Business.
    • Detailed Operations Business Plan Type: Operational Plan.
    • Business Location Section: Operations Plan.
    • Financial Statement Assumptions: Assumptions Sheet.
    • Early-Stage Business Plan for Feasibility Analysis: Summary Business Plan.
    • Summary Business Plan Length: 5 to 10 pages.

    Quiz 7 Study Notes

    • Employee Retaliation Perception (2021): 79%.
    • Common vs. Preferred Stock: Common stock is issued more broadly than preferred stock.
    • Founder's Agreement Exclusion: Recommended attorney(s).
    • Limited Partnership Usage: Real estate development, oil and gas exploration, motion picture ventures.
    • Non-Compete Agreement: An agreement stating an employee will not work for a competitor for a specific time after leaving their current job.
    • Limited Partnership Misconception: Both limited and general partners are equally responsible for partnership debts.
    • Graza's Recovery: Sincerity of the founder's personal apology to impacted customers.
    • Common Stock Misconception: Common stock is issued more narrowly than preferred stock.
    • Piercing the Corporate Veil: When a court ignores the corporation's separate legal status, holding owners personally liable.
    • Unethical Situation Description: Ethical Quandary.
    • Fictitious Business Name Permit Requirement: Some states require a permit for businesses using a different name than the owner's.
    • C Corporation Disadvantage: Income is subject to double taxation.
    • Public Corporations: Corporations trading on organized stock exchanges.
    • Partnership Types: General and Limited.
    • Vesting Schedule Length: 36 to 48 months.
    • Limited Partnership Document: Limited Partnership Agreement.
    • Corporation Types: C and Subchapter S.
    • Non-compete Agreement Type: Non-compete.
    • Limited Partnerships Usage: Real estate development, oil and gas exploration, motion picture ventures.
    • Standard Disadvantage of Subchapter S Corporation: No restriction on the number of shareholders.
    • Two Stock Types: Common and Preferred.
    • Dispute Resolution Process: Mediation.
    • Conservative Investor Stock Type: Preferred stock.
    • Limited Partnership Difference: Includes two classes of owners.
    • Corporation Formation Document: Articles of Incorporation.
    • General Partnership Advantage Exclusion: The liquidity of each partner's investment is low.

    Quiz 8 Study Notes

    • Historical Financial Statements: Reflect past performance.
    • Income Statement Function: Reflects a firm's profit or loss.
    • Liquid Asset Indicator: Working capital.
    • Profit Margin Calculation: Net income divided by net sales.
    • Long-Term Liability Example: Real estate mortgage.
    • Financial Comparisons: Financial ratios.
    • Statement of Cash Flows Sections: Operating, investing, and financing.
    • Pro Forma Financial Statements' Status: Planning tools, projecting future periods.
    • Account Type for Money Owed: Accounts receivable.
    • Statement of Cash Flows' Financing Activities: Cash raised through borrowing/selling stock, or cash used for dividends/buybacks.
    • Operating Summary Statement: Income statement.
    • Financial Objective Measurement: Efficiency.
    • Finance Management Focus: Highest return and raising money.
    • Profit Margin Calculation: Net income divided by net sales.
    • Firm's Financial Structure Condition: Stability.
    • Short-Term Obligation Fulfillment: Liquidity.
    • Balance Sheet Asset Order: Order of liquidity.
    • Non-Financial Objective for Entrepreneurial Firm: Timeliness.
    • Pro Forma Statement of Cash Flows Most Important Aspect: Projecting sufficient cash.
    • Cost of Sales Forecasting Method: Percent-of-sales method.
    • Historical Financial Statements: Reflect past performance.
    • Statement of Cash Flows' Financing Activities: Cash raised through borrowing/selling stock, or cash used for dividends/buybacks..
    • Inventory Accounting Occasion: January 1.
    • Financial Statement Description: Written report quantitatively describing a firm's financial health.
    • Statement of Cash Flows Description: Summarizes changes in a firm's cash position over a specified period.

    Quiz 10 Study Notes

    • Early-Stage Venture Capital Investment Stage: Seed funding.
    • Venture Capital Firms: Limited partnerships.
    • Techstars Role: Startup accelerator program.
    • Crowdfunding Types: Rewards-based and equity-based.
    • Equity Financing Description: Exchanging partial ownership for funding.
    • Subsequent Venture Capital Investment Term: Follow-on funding.
    • Grant Program Misconception: Granting agencies are visible and it's typically easy to find one.
    • Equity Funding Disadvantage: Firm's owners relinquish part of their ownership.
    • SBIR/STTR Programs' Source: National Science Foundation.
    • Debt Financing Methods: Loans or selling corporate bonds.
    • Equity Investor Investment Duration: 5 to 8 years.
    • Seed Funding Source: Friends and family.
    • Post-Initial Venture Capital Term: Follow-on funding.
    • Money Manager Partnerships: Venture capital firms.
    • Business Angel Misconception: Business angels invest at later stages, typically funding ventures through venture capital.
    • Lease Disadvantage: A lease agreement is easier to negotiate than a purchase agreement.
    • Common Debt Financing Sources: Commercial banks and SBA guaranteed loans.
    • Equity Funding Disadvantage: Firm's owners relinquish part of their ownership.
    • Due Diligence Description: Process of investigating a potential venture's merits.
    • Equity Funding Common Source Exclusion: Government grants.
    • Startup Funding Needs: Cash flow challenges, capital investments, lengthy product development cycles.
    • Equity Financing Definition: Exchanging partial ownership for funding.
    • Seed Money Source: Founders' own pockets.
    • First Public Stock Sale Term: Initial public offering.
    • SBIR/STTR Programs' Source: National Science Foundation.
    • Startup Partnering Location: Techstars Startup Weekend.
    • Equity Investor Investment Duration: 5 to 8 years.
    • Techstars Role: Startup accelerator program.
    • Debt Financing Methods: Loans or selling corporate bonds.
    • Primary Debt Financing Sources: Commercial banks and SBA guaranteed loans.

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    Test your knowledge on essential business planning concepts and employee relations. This quiz covers important definitions, layout specifics of business plans, and insights into stock types and employee retaliation perceptions. Perfect for students and professionals in business studies.

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