Management Policy 1

Financial Ratios

100

This ratio measure the % share of assets owed to lenders

Debt to asset ratio

200

This ratio compares lender financing to owner financing (smaller values imply less debt)

Debt to equity ratio

300

This ratio compares current assets to current liabilities (values greater than 1 are preferred) larger values imply greater liquidity

Current Ratio

400

Margin of safety in a dollar value

Working Capital

500

If a company has a 70% debt to asset ratio, what does this mean for the company?

70% of the assets are owed to lenders

Balance Sheet Basics

100

Name 3 items that would fall in the category of current assets

Cash

Checking account balance

Inventories

Savings account

200

Name two items that would be classified as current liabilities

Accounts payable

Notes payable

300

If assets are $10 and liabilities are $5, what is owner's equity?

Assets - Liability = OE

5

400

Name 3 examples of non-current assets

Buildings

Land

Machinery

Equipment

500

If Total (Owners) equity is $5 and contributed capital is $3, what is the value for retained earnings?

$2

RE=Equity-CC

Personal Selling

100

The process of learning as much as possible about the prospect

Pre-approach

200

The most important attribute of a salesperson

Listening

300

Confirming the amount of inventory and the agreed upon price is one way to accomplish this step in the personal selling process

Close

400

This step in the personal selling process involves identifying good customers and screening out poor ones by looking at factors such as financial ability, volume of business and needs.

Qualifying

500

This part of the personal selling process is where the salesperson meets and greets the buyer and gets the relationship off to a good start

Approach

Advertising

100

What are two objectives of advertising?

Shift demand

Change elasticity

200

The four components of the Marketing Mix

Product Place Price Promotion

300

The three components of a good TV advertisement

Hook

Target

Emotion

400

This concept measures the degree to which liabilities are backed up by assets

% of population reached

% that understands the message

% that has awareness

% with a favorable attitude

% of first time buyers

500

Name the 5 stages in the product lifecycle

Product development

Introduction

Growth 

Maturity

Decline

Hodge Podge

100

If all assets were sold to pay off all liabilities, the result would be 

Owners Equity

200

Which financial ratio measures liquidity

Current Ratio

300

The term that describes the ability to meet financial obligations as they come due without disturbing normal revenue generating activities

Liquidity

400

This concept measures the degree to which liabilities are backed up by assets

Solvency

500

The product that has the largest advertising budget when compared as a percent of sales

Breakfast Cereals