Question 1

What are two major projected financial statements developed during financial planning?

Accepted Answer

The two major projected financial statements developed during financial planning are a pro forma balance sheet and pro forma income statement. These statements provide estimates of future financial performance and help businesses plan for the future by projecting expected revenues, expenses, and profits, as well as the changing balance of assets, liabilities, and equity over time. Predicted or forecasted statements of cash flows could also be used, but they are not as commonly used as the pro forma statements of balance sheet and income statement. Prototype statements of retained earnings and balance sheet are not commonly used during financial planning.

Question 2

"To enrich the lives of everyone in WestJet's world by providing safe,friendly,affordable air travel." Is best described as which of the following?

Accepted Answer

A mission statement is a statement describing the purpose and objectives of the organization, focused on the company's core values and principles. The given statement outlines WestJet's purpose of enriching the lives of everyone in its world through safe, friendly, and affordable air travel.

Question 3

An overall explanation of why an organization exists and where it is trying to head is referred to as which of the following?

Accepted Answer

An organization's vision is a statement that explains its overall purpose and where it aims to be in the future. It helps guide the organization's decision-making and strategy development. Tactical plans are short-term, specific plans for achieving specific objectives. The prime directive is a concept from science fiction and does not apply to organizational management. A corporate charter is a legal document that establishes a corporation's existence and outlines its purpose and structure. It usually includes the organization's vision as well.

Question 4

A meaningful mission statement should address topics about an organization such as which of the following?

Accepted Answer

A meaningful mission statement should address an organization's self-concept and company philosophy, which includes its core values, beliefs, and purpose. It helps to guide the organization in making decisions and establishing goals that reflect its identity and aspirations. The other choices, such as form of ownership, methods of financing, advertising strategy, distribution plan, tactical plans, and contingency plans are important elements of an organization's overall strategy, but they do not specifically pertain to its mission statement.

Question 5

Which of the following forecasts the sales,expenses,and net income for the company in some future time period?

Accepted Answer

A pro forma income statement is a financial statement that forecasts the company's expected sales, expenses, and net income for a future time period. The other options listed (inventory turnover ratio and net working capital) are financial ratios used to measure a company's efficiency and liquidity, respectively, and a pro forma balance sheet is a financial statement that forecasts a company's expected assets, liabilities, and equity at a future point in time. None of these directly forecast a company's sales, expenses, and net income for a future time period.

Question 6

"Make the best product,cause no unnecessary harm,and use business to inspire and implement solutions to the environmental crisis." This statement by Yvon Chouinard,founder of Patagonia,can be best described as which of the following?

Accepted Answer

The statement by Yvon Chouinard clearly outlines the purpose and values of the company, which aligns with being a mission statement. It expresses the company's commitment to making a quality product while remaining environmentally conscious and inspiring others to do the same. It does not provide specific steps or actions, which would be more indicative of a tactical or strategic plan.

Question 7

A vision for a company is which of the following?

Accepted Answer

A vision for a company is an explanation of why the company exists and where it wants to go. It provides a clear direction and purpose for the company and helps guide decision making and goal setting. It is different from an objective, which is a specific, measurable goal that the company wants to achieve within a certain time frame. A vision is also more relevant for the long-term, as it sets the overall direction for the company's future.

Question 8

Gina Raiter,the president and CEO of AutoMotion Auto Service Centres,has asked several managers and employees to help establish a statement to outline the fundamental purposes of their company.The result of this effort is likely to be which of the following?

Accepted Answer

A mission statement is a written declaration of an organization's fundamental purpose that identifies the scope of its operations, customer base, and products or services offered, as well as its values and goals. As such, it is the most appropriate choice out of the given options for outlining the fundamental purposes of a company. The other options are not relevant in this context - a payoff matrix is a tool used in decision-making, a tactical plan is a more detailed action plan for achieving specific objectives, and an organizational chart is a diagram that depicts the structure of an organization and the relationships among its positions.

Question 9

Which of the following measures the ability to pay debts as they come due?

Accepted Answer

The liquidity ratio measures a company's ability to pay off its short-term debts with its current assets. It is a measure of the company's ability to meet its obligations as they come due.

Question 10

Employees often work with managers to develop which of the following that outlines the fundamental purposes of their organization?

Accepted Answer

A mission statement outlines the fundamental purposes and goals of an organization. It helps to guide employees in their decision-making and provides a clear direction for the organization's future activities. The other options are not related to outlining the fundamental purposes of the organization.

Question 11

The key numbers that financial managers use to calculate ratios usually come from which of the following financial statements of a company?

Accepted Answer

Financial managers use key numbers from the balance sheet and income statement to calculate ratios. The balance sheet provides information about a company's assets, liabilities and equity, while the income statement shows revenues, expenses, and net income for a specific period of time. These two statements are commonly used to calculate financial ratios that help assess a company's financial health and performance.

Question 12

Which of the following are the four basic categories of financial ratios?

Accepted Answer

The answer of Which of the following are the four...

Question 13

Which of the following is a mathematical tool financial managers use to assess the financial strengths and weaknesses of their company?

Accepted Answer

Ratio analysis is a mathematical tool used by financial managers to evaluate the financial performance of their company. It involves analyzing various financial ratios such as liquidity ratios, profitability ratios, and debt ratios to assess the company's financial strengths and weaknesses. CAD/CAM and value stream mapping are manufacturing tools used for designing and improving products and processes, while capital budgeting is a financial decision-making tool used for evaluating investment opportunities.

Question 14

Which of the following defines the organization's purpose,values,and core goals,providing the framework for all other plans?

Accepted Answer

A mission statement defines the organization's purpose, values, and core goals, which serve as the foundation for all other plans and actions. A position statement expresses the organization's stance on a particular issue or topic. A strategic plan outlines the organization's long-term goals and objectives, while a tactical plan details the specific actions and steps to achieve those goals.

Question 15

Monica has just been hired by the Misty Mount Corporation to take over as the new chief executive officer.Her initial impression is that the company is in disarray,primarily because the employees do not have a sense of purpose or a common set of values.Monica's observations suggest that she needs to provide which of the following for Misty Mount?

Accepted Answer

Monica needs to provide a clear sense of direction and purpose for the company by establishing a vision. This will give the employees a common goal to work towards and a shared set of values to guide their actions. A contingency plan, objective function, and corporate logo may also be important for the company's success, but they are not the most pressing need identified in the scenario.

Question 16

When financial managers are concerned about the ability to pay off debts that will come due in the next year,they are likely to focus on which of the following?

Accepted Answer

Liquidity ratios measure a company's ability to meet short-term debt obligations. Therefore, financial managers who are concerned about the ability to pay off debts that will come due in the next year will likely focus on liquidity ratios such as current ratio, quick ratio, and cash ratio. Capital budgets, incremental analysis, and leverage ratios are more relevant for long-term financial planning and decision making.

Question 17

Customers who visit any Good As New Appliance Repair Centre see a framed statement prominently displayed near the front door.The plaque describes the company's fundamental purposes.In part,it states that "All Good As New Centres operate under the belief that every customer deserves good quality parts,fast and dependable service,and a fair price." The words on this plaque probably reflect which of the following of Good As New?

Accepted Answer

The statement on the plaque describes the company's fundamental purposes, which aligns with the definition of a mission statement. A strategic plan would be a more detailed and comprehensive plan for achieving the mission, while a corporate agenda and charter typically outline broader goals and structural aspects of a company.

Question 18

As part of the financial planning process,planners would create projected financial statements,also known as which of the following statements?

Accepted Answer

Projected financial statements are also known as pro forma statements. These statements are based on assumptions and predictions about future financial performance and are used to help guide financial decision-making.

Question 19

In a company in which an effective vision has been provided,which of the following is the most likely result?

Accepted Answer

An effective vision provides employees with a sense of purpose and a common set of values, which helps align their actions towards a common goal. However, tactical planning and setting goals and objectives are still necessary to achieve the company's vision. The economic and competitive environments may not necessarily be predictable just because there is a vision in place.

Question 20

For Google,to organize the world's information and make it universally accessible and useful is which of the following?

Accepted Answer

This statement represents Google's mission statement.

Quiz 7: Analyzing the Business