Suppose that you are a bank manager and receive an application for a credit line of 100,000 from a small firm. What is the first thing you would look at?

1 point

The Cash Flow Statement

The Profit and Loss Statement

The business

The Balance Sheet

2.

Question2

The main difference between a distribution and a production company is:

1 point

The production company has less fixed assets than the distribution company.

Distribution companies normally have better customers than production companies.

There is no difference between distribution and production companies.

Distribution companies normally have lower margins.

3.

Question3

A business is very cyclical when:

1 point

The revenues depend on many different customers.

The revenues of the company depend highly on the economic cycle.

There are high revenues in certain months of the year.

Other companies in the same industry are not cyclical.

4.

Question4

Which of the following companies are very cyclical?

1 point

Philip Morris, a tobacco company.

General Motors, a car manufacturer.

Pfizer, a leading pharmaceutical.

Gillette Co., that makes razors and shaving supplies.

5.

Question5

If sales are growing and operational expenses are decreasing, then:

1 point

The gross margin has to grow.

The return on sales is probably increasing.

There are not economies of scale.

Operational expenses cannot decrease if sales increase.

6.

Question6

If you have many and small customers:

1 point

Your margins will be lower than in a situation with few and powerful customers.

Your distribution costs are lower than with few and powerful customers.

Your margins will be higher, but distribution costs also higher.

Your margins will be equal than a situation with few and powerful customers.

7.

Question7

Airbus has fewer inventories as a percentage of sales than Procter & Gamble.

1 point

True

False

8.

Question8

If gross margin falls, then by just looking at the sales and COGS, we can infer this change comes from a price decrease or from a cost per unit increase:

1 point

True

False

9.

Question9

When competition is strong, the margin as percentage of sales is also strong.

1 point

True

False

10.

Question10

If receivables increase,

1 point

It's unrelated to sales.

It's either because sales have increased or days of collection have increased.

It's because customers are paying late.

It must be because sales have increased.