Entrepreneurship Test 3
Terms
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- What are the 4 P's of Marketing?
- Price, Product, Place, & Promotion
- What 3 functions do marketing materials serve?
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1.Organize thinking
2.Expand company knowledge of the business
3.Sell product or service - What is philanthropy?
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Giving money, time, advice, skills to help minimize or eliminate social, environmental or political problems
- What is a foundation?
- Foundations are nonprofits that raise funds for charities that assist people, animals, the environment, and other causes
- What is cause related marketing?
- Inspired by commitment to a social, environmental or political cause. Ex. 1% of revenues to breast cancer cures
- What are fixed operating costs (specific items)?
- USAIIRD: Utilities, Salaries, Advertising, Insurance, Interest, Rent, Depreciation
- How much reserve (in months) should you have in FC before opening?
- 3 months
- What are the three types of financial statements?
- Income Statement, Balance Sheet, and Cash Flow
- Formula for ROI
- Net Profit/Investment
- What is on a balance sheet?
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1. Shows performance with respect to paying off debt & increasing equity
2. Snapshot of what is owned & owed
(Assets = Liabilities + Equity)
- What is on an income statement?
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1.Prepared monthly and at end of fiscal year
2.Also called “profit and loss statementâ€
3.Shows whether or not business is making a profit
4.Profit is entrepreneur’s reward for adding value to scarce resources
- What specific items are on an income statement?
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Revenue
Cost of Goods Sold (COGS)
Other Variable Costs
Contribution Margin (Gross Profit)
Fixed Operating Costs (USAIIRD)
Pre-Tax Profit
Taxes
Net Profit/(Loss)
- What 3 things do you need to calculate ROI?
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Net Profit, Investment, The period of time for which you are calculating ROI (typically one month or one year).
- What is the denominator of all ratios from the income statement?
- Sales/Revenue
- Return on sales formula
- Net income/ Sales
- Operating Ratio
- Fixed Operating Costs / Sales
- What is net worth?
- Same as Equity or (OE)
- Quick Ratio
- (Cash + marketable securities) /Current Liabilities
- Current Ratio
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Current Assets /Current Liabilities
- Debt to Equity Ratio
- Debt/Equity
- Debt Ratio
- Debt/Assets
- What are the three sections on a cash flow?
- Cash inflows, cash outflows, and net change in cash flow
- Cash flow formula
- Cash flow = Receipts - Disbursements
- Burn Rate
- Cash on Hand/ Cash Outflow per month
- Working Capital
- Current Assets - Current Liabilities
- Double Bottom line
- Has your company made a profit at the bottom of an income statement or not?