MONEY LOGIC
Which financial concept answers: “What did it cost the business to generate its revenue?”
Expenses
A hotel washes more towels when more rooms are occupied. What type of cost behavior does laundry show?
Variable cost
What report evaluates operating performance over a period?
Income Statement / Profit and Loss Statement / P&L
Which financing source is described as a financial gift for a specific goal or project?
Grant
Name one item included in financial projections from the PPT.
Any one: 12-month P&L projection, 3–4 year P&L projection, cash-flow projection, projected balance sheet, break-even calculation.
A company’s expenses are greater than its revenue. What financial result does it have?
Loss
A factory pays the same building rent even when production increases. How is the rent classified by cost behavior?
Fixed cost
A business sells 500 pizzas at $12 each. What is sales revenue?
$6,000
Which financing approach may involve personal savings, bartering, and minimizing cash outflows?
Bootstrapping
Why should a founder prepare financial projections before deciding how much money to raise?
Because projections help estimate the financing actually required.
Why can a company have strong sales but still perform poorly financially?
Because high revenue does not guarantee profit; expenses may also be high.
A carpenter’s wages can be traced directly to the house being built. How should the cost be classified by traceability?
Direct labor / direct cost
If ingredients cost $4 for each of those 500 pizzas, what is total COGS?
$2,000
A founder wants external funding but does not want to give up ownership. Which financing category best fits this preference?
Debt financing / bank loan
Which financing channel was the most studied in the 48-study review presented in the PPT?
Bank credit — 31.7%
A company has revenue of $80,000 and expenses of $68,000. Calculate net income.
$12,000
Factory depreciation is difficult to trace to one specific product and stays constant in total within the relevant range. Give both classifications.
Indirect and fixed
Using the previous two answers, calculate total gross profit.
$4,000
What is the main ownership difference between a bank loan and an angel investment?
A bank loan creates debt but does not normally give the lender ownership; an angel investor usually receives equity.
Put these in the PPT’s logical order:
Financing Choice — Expenses — P&L — Revenue — Cash Flow — Financing Need
Revenue → Expenses → Cash Flow → P&L → Financing Need → Financing Choice
Using the previous figures, calculate the profit margin.
15%
Why can glue or adhesives be indirect and variable at the same time?
They may increase as production increases, making them variable, but it may not be practical to trace the exact amount used to one specific product, making them indirect.
Why is the $4,000 gross profit not necessarily the final profit of the business?
Because wider operating expenses such as rent, wages, supplies, and other expenses still need to be covered.
A startup needs a large amount of capital and also wants professional investment expertise, industry networks, and monitoring. Which source from the PPT best matches this profile?
Venture capital
Why does the PPT conclude that there is no universally best financing source?
Because financing effectiveness depends on the characteristics and needs of the firm and the surrounding financing ecosystem.