Question 1

Provide four factors that affect and influence sales forecasts.

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Question 2

The factors are incorporated in the financial planning process?

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Question 3

Consider that you are a finance manager, and one of your junior staff wanted an explanation of the term planning horizon. Provide a definition that conveys what the term means from a finance perspective.

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Question 4

How would you respond to a business owner who says, "I see no need in putting together a financial plan for the future. All of the numbers in the plan are just guesses anyway, no one knows what will happen for sure. I have a good idea what sales will be and beyond that, if sales are good, who needs a plan?"

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Question 5

What factors does financial planning consider?

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Question 6

Consider that you are a finance manager, and one of your junior staff wanted an explanation of the term debt capacity. Provide a definition that conveys what the term means from a finance perspective.

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Question 7

What four elements are incorporated in financial planning?

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Question 8

Determining the amount of liquidity needed by a firm is referred to as the:

Accepted Answer

The working capital decision involves determining the amount of liquidity or current assets a firm needs to maintain to run its day-to-day operations efficiently. This includes managing cash, inventory, and receivables to ensure the firm can meet its short-term obligations.

Question 9

Consider that you are a finance manager, and one of your junior staff wanted an explanation of the term capital intensity ratio. Provide a definition that conveys what the term means from a finance perspective.

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Question 10

Consider that you are a finance manager, and one of your junior staff wanted an explanation of the term external financing needed (EFN). Provide a definition that conveys what the term means from a finance perspective.

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Question 11

The dividend payout ratio is defined as cash dividends divided by:

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The dividend payout ratio is calculated by dividing the total amount of dividends paid to shareholders by the company's net income. This ratio shows what portion of the net income is being paid out as dividends.

Question 12

One of the primary benefits of aggregation is gaining an understanding of the:

Accepted Answer

Aggregation helps in understanding the overall investment needs of a firm by combining and analyzing various financial aspects and requirements.

Question 13

Consider that you are a finance manager, and one of your junior staff wanted an explanation of the term aggregation. Provide a definition that conveys what the term means from a finance perspective.

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Question 14

It has been said that, "conventional business wisdom holds that financial plans don't work, but financial planning does." What is meant by this? Ignoring the accuracy of the numbers in a financial plan (which can only be determined after the fact anyway), what does the process of financial planning accomplish?

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Question 15

What does financial planning allow firms to do?

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Question 16

What do you think will happen to a growing business whose owner can forecast sales quite accurately but has no idea what impact sales growth will have on assets?

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Question 17

Fixed assets are often said to grow in a "stair-step" like manner. What does this mean? Why is this a better way to explain the growth of fixed assets as compared to saying that fixed assets grow proportionally with sales?

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Question 18

Provide five advantages that planning can achieve.

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Question 19

Why is it just as important to project the statement of financial position as it is to project the statement of comprehensive income?

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Question 20

The sales forecast for most financial plans is:

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Quiz 4: Long-Term Financial Planning and Corporate Growth

Provide four factors that affect and influence sales forecasts.

The factors are incorporated in the financial planning process?

Consider that you are a finance manager, and one of your junior staff wanted an explanation of the term planning horizon. Provide a definition that conveys what the term means from a finance perspective.

What factors does financial planning consider?

Consider that you are a finance manager, and one of your junior staff wanted an explanation of the term debt capacity. Provide a definition that conveys what the term means from a finance perspective.

What four elements are incorporated in financial planning?

Determining the amount of liquidity needed by a firm is referred to as the:

Consider that you are a finance manager, and one of your junior staff wanted an explanation of the term capital intensity ratio. Provide a definition that conveys what the term means from a finance perspective.

Consider that you are a finance manager, and one of your junior staff wanted an explanation of the term external financing needed (EFN). Provide a definition that conveys what the term means from a finance perspective.

The dividend payout ratio is defined as cash dividends divided by:

One of the primary benefits of aggregation is gaining an understanding of the:

Consider that you are a finance manager, and one of your junior staff wanted an explanation of the term aggregation. Provide a definition that conveys what the term means from a finance perspective.

What does financial planning allow firms to do?

What do you think will happen to a growing business whose owner can forecast sales quite accurately but has no idea what impact sales growth will have on assets?

Fixed assets are often said to grow in a "stair-step" like manner. What does this mean? Why is this a better way to explain the growth of fixed assets as compared to saying that fixed assets grow proportionally with sales?

Provide five advantages that planning can achieve.

Why is it just as important to project the statement of financial position as it is to project the statement of comprehensive income?

The sales forecast for most financial plans is: