Selling Price
A(n) ___________ refers to the net profit the company wants to make from the sale and is usually represented using a percentage
What is profit margin?
The cash a company has, a company’s accounts receivable, inventory, equipment, and company vehicles are________
What are Assets?
Subtracting the cost of goods and expenses from income calculates ________.
What is net income?
________ and _________ costs are the two main costs that companies incur when producing products and services
What are Fixed and Variable?
Investors and businesses use a ___________ analysis to understand how much cash the business generates and spends over a specific period.
What is cash flow?
________________ is used by businesses to show them how much their investment is earning.
What is Return on investment (ROI)?
An operating budget outlines the ________ a business will need to run efficiently.
What are funds?
_____________ are wealthy individuals willing to finance a business for an equity stake in the business in return.
Who are Angel investors?
A(n) ______ price represents how much money it costs a business to make or obtain the products or how much it costs a business to perform the service.
What is cost?
__________ are the money that a company owes, and this includes accounts payable such as credit card payments, bank loans, and mortgage payments.
What are Liabilities?
Subtracting the cost of goods from income calculates _____________.
What is gross income?
_________ costs fluctuate depending on production.
What is Variable?
Subtracting total costs from total cash calculates an ______________.
What is ending cash balance?
ROI gives business owners a way to calculate whether their product or service is __________ or if they need to make adjustments.
What is cost-effective?
What is one reason why a company should make an operating budget?
Answers may vary but should explain that an operating budget outlines the funds a business needs to run efficiently or that an operating budget helps a company plan its budget and set financial goals
Why might bootstrapping not be a viable option for many new business owners?
Answers may vary but should explain that many people do not have the financial resources for this option to be viable
The formula to determine the selling price is:
What is (cost x desired profit margin) + cost?
A(n) __________ is a financial report that shows a company's assets, liabilities, and equity for a specific period.
What is a Balance Sheet?
Multiplying gross profit by the tax rate calculates ______________.
What is income tax expense?
________ costs remain the same no matter the volume of production .
What is Fixed?
Subtracting a month’s ending balance from a month’s starting balance calculates a _________.
What is Burn Rate?
Identify the calculation for ROI
(Selling Price-Production Cost)=Net Profit
Net Profit/Production Cost x 100= ROI
List two one-time expenses that most businesses have.
Answers may vary but can include equipment, permits, logo designs, web design, a down payment on a rental property, a business plan, market research, or company signs
When must Small Business Administration (SBA) real estate loans and equipment and inventory loans be repaid?
Real estate loans must be paid back within 25 years, while equipment and inventory loans must be repaid in 10 years
The cost of manufacturing the pants was $18 per pair, and they want to make a 20% profit on each pair they sells. What is the selling price?
What is $21.60?
Subtracting liabilities from assets calculates ________.
What is Equity?
Dividing total expenses by sales price calculates a _____________.
What is break-even point?
For a restaurant; take-away boxes, credit card bills, employee wages, and ingredients are all _________ costs.
What is Variable?
Multiplying a month’s revenue by 12 calculates a __________.
What is run rate?
Jacob sells sweaters. What is Jacob’s ROI?
a. Production cost: $17.20/sweater
b. Selling price: $30/sweater
What is 74%?
List two recurring costs that most businesses have
Answers may vary but can include rent, utilities, employee wages and salaries, supplies, taxes, advertising and marketing, or insurance
What is one reason a business owner should read a crowdfunding platform’s fine print before using it as a funding source?
Answers may vary but should include that many crowdfunding platforms charge a processing fee for each purchase or that some platforms require business owners to meet their financial goals before they can access any funds that have been raised.
Alfred owns a restaurant. A new dish is being added to the restaurant’s menu. The cost of making the dish is $6.75, and he wants to make a 33% profit on each dish he sells. What is Alfred’s selling price?
What is $8.98?
Miguel sells cars. He has $26,000 in cash, $34,000 in inventory, a $4,600 credit card balance, and $7,900 in long-term debt. What is Miguel’s equity?
What is $47,500?
Jane owns a dress-making business. Her income last quarter was $8,000, her cost of goods was $1,500, and her total expenses were $3,000. What were Jane’s gross income and net income?
Gross income: $6,500
Net income: $3,500
For a retail business; rent, insurance, internet and employee salaries are considered ________ costs.
What is Fixed?
Yennifer sells candles. Last month, her starting balance was $6,200, her ending balance was $4,900, and her revenue was $2,300. What was Yennifer’s burn rate for last month, and what is her current run rate?
a. Burn rate: $1,300
b. Run rate: $27,600
Carlos provides detailing services. What is Carlos’s ROI?
a. Production cost: $48.89/detail
b. Selling price: $65/detail
What is 33%?
List five common startup costs that most businesses need to plan for before starting the business.
Answers may vary but can include a business plan, market research, a down payment on a rental property, logo design, company signs, rent, equipment, supplies, utilities, insurance, taxes, employee wages and salaries, advertising and marketing, licenses and permits, or web design
List two eligibility requirements for Small Business Administration (SBA) grants.
Answers may vary but should include that the business must operate for a profit, operate within the United States or its territories, the owners must have responsible owner equity to investment, or use alternative financial resources before seeking financial assistance, including using personal assets