BA 101|90 Midterm Study Guide Questions Well Answered|2024
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Course
BA 101
Institution
BA 101
A high inventory turnover ratio means what - ️️it may indicate great efficiency or loss of sales due to insufficient stock levels.
Activity Ratios: How efficiently are assets and liabilities being managed? - ️️A/R Turnover: Net Credit Sales / Avg. Accounts Receivable
Inventory Turnover: C...
BA 101|90 Midterm Study Guide
Questions Well Answered|2024
A high inventory turnover ratio means what - ✔ ✔ it may indicate great efficiency or loss of sales due
to insufficient stock levels.
Activity Ratios: How efficiently are assets and liabilities being managed? - ✔ ✔ A/R Turnover: Net
Credit Sales / Avg. Accounts Receivable
Inventory Turnover: COGS / Avg. Inventory
Asset turnover ratio is what? - ✔ ✔ Net income/total assets. Its better if its higher.
Blake Mycoskie video (Tom's). - Why did he choose to start a business instead of a charity? - ✔ ✔ He
chose to start a business first because he didn't want to rely on donations and handouts.
Demographics - ✔ ✔ the characteristics of human population and population segments.
Diversity/aging/household structure
E.g. of creative destruction. - ✔ ✔ Movies. Netflix and Red box changed the way we got videos. Now
we just stream everything. Death of Hollywood video and blockbuster.
How do companies fund these short term obligations? - ✔ ✔ • Collected revenue • Trade credit
(accounts payable) • Line of credit (similar to a consumer credit card) • Commercial Paper • Short term
loans (secured and unsecured)
• Factor (company sells it's A/R at a discount)
How do companies improve cash flow? - ✔ ✔ Turn receivables (i.e. collections) Stretch payables
Minimize inventory Project, Project, Project
How does government affect business? - ✔ ✔ Monetary Policy, Fiscal Policy, Laws/Regulations
How does society affect business? - ✔ ✔ It dictates how businesses can profit. Things like
demographics and consumer taste or preference do that. Societys role in government.
Is it better for a company to have high profitability ratios? - ✔ ✔ Yes
Laws/Regulations - ✔ ✔ Environment, Safety, competition and price controls.
Leverage Ratios: Does firm have the "right" mix of debt and equity? - ✔ ✔ Debt to Equity: Total
Liabilities / Total Equity
, Debt to Total Assets: Total Liabilities / Total Assets
Liquidity Ratios: Can firm make required debt payments currently? - ✔ ✔ Current Ratio: Current
Assets / Current Liabilities
Quick Ratio: (Current Assets - Inventory) / Current Liabilities
Maslow's Hierarchy of Needs - ✔ ✔ 1) Physiological
2) Safety
3) Sense of belonging and need
4) Self Esteem
5) Self actualization
Monetary Policy - ✔ ✔ Increasing/Decreasing Money supply, this impacts interest rates. Central
Banks, The Fed
Profitability Ratios: Is firm succeeding at earning a profit and
generating a return for shareholders? - ✔ ✔ Gross Profit Margin: Gross Profit / Net Sales
Return on Investment: Net Income / Total Assets
Return on Equity: Net Income / Total Equity
R-C=P - ✔ ✔ Revenue - Cost = Profit
Risk and reward have a direct relationship, what does this mean? - ✔ ✔ The higher the risk the
higher the reward.
State of the Economy - ✔ ✔ Understands how society, government, global environment, economic
system have a relationship with business.
What are accrual and cash methods of accounting? - ✔ ✔ Accrual records when you are owed
money.
Cash accounts for when you actually receive the money.
What are different economic indicators - ✔ ✔ society, government, global environment, economic
system
What are internal and external stakeholders? OSU example from lecture. - ✔ ✔ Internal : Employees,
Managers, Owners
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