Small Business Management – Chapter 11 Quiz Questions: What are the four important areas (page 422) that must be considered in assessing the financial performance of a small business?What is the formu

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Small Business Management – Chapter 11

Quiz Questions:

  1. What are the four important areas (page 422) that must be considered in assessing the financial performance of a small business?
  2. What is the formula for ‘current ratio’ and what is the threshold number/value that the current ratio should not fall below to ensure the company has sufficient working capital to cover cash flow needs?
  3. What is the formula for ‘defensive interval ratio’ and what does it tell you?
  4. Why is the gross profit margin probably the most important metric a small business owner can monitor?
  5. Which type of cost and why, variable cost or fixed cost, more directly affects a business’ ability to reach break-even?
  6. How does gross margin directly effect a business’ ability to reach break-even?https://www.mediafire.com/file/p15ruw7v2borfe3/small-business-management-theory-and-practice.pdf/file