Deck 11: Financial Management and Fiscal Planning Tools and Techniques

Question 1

"Pro forma" accounting statements as used in business financial planning means:

A)actual accounting of income and expenses
B)actual accounting of assets and liabilities
C)a statement of anticipated costs and revenues or change in assets,liabilities and equity based upon prior (operating)financial performance.
D)none of the above

Answer 1

C
Pro forma means "in name" only.It is a plan for the future,but is based upon past and current financial records.It is a picture of planned income and expenditures as well as changes in the assets,liabilities and equity positions of the firm into the next/future period.

Question 2

To fund a franchise business,most franchisee use:

A)a single source of funding
B)multiple sources of funding
C)already have sufficient liquidity to fund the startup and need no additional funding
D)none of the above

Answer 2

B
Most franchisees need multiple sources of funding

Question 3

In financial planning with the franchised business,the most basic and essential variable of the financial planning tools is the:

A)inventory schedule
B)sales forecast
C)pro forma balance sheet
D)econometric models for forecasting liabilities

Answer 3

B
Sales forecast which is an extrapolation of past sales set in terms of the general economic conditions confronting the local economy that the franchise system operates within

Question 4

The income statement is used to plan:

A)liquidity for the firm
B)profitability for the firm
C)anticipated costs of operation
D)asset utilization for the business

Question 5

All of the current assets of the firm,or more specifically,current assets minus current liabilities equals:

A)cash discounts
B)marketable securities
C)inventory management
D)working capital

Question 6

Often considered the most critical financial component of working capital is

A)marketable securities
B)inventory management and recovery
C)cash
D)accounts receivable

Question 7

The cash flow statement is used to plan:

A)liquidity for the firm
B)profitability for the firm
C)anticipated costs of operation
D)asset utilization for the business

Question 8

Which one of the following is Not a common method of borrowing funds in the short-term when considering the rate of interest to be paid:

A)percentage-of-sales method
B)simple
C)add-on
D)discount

Question 9

Short-term obligations created by the franchisee in buying supplies,materials or services associated with running the business are referred to as:

A)inventory management
B)accounts receivable
C)accounts payable
D)working capital

Question 10

Estimation of sales and other income for a period and cash disbursements to be paid in the same period identifies the components of the:

A)balance sheet
B)income statement
C)cash flow statement
D)none of the above.