Question 1

It is critical to show the pro-forma projections on a monthly basis when a company is:

Accepted Answer

A)  Experiencing negative cash flow 
B)  Not earning any revenue 
C)  Most vulnerable to failure 
D)  Facing strong competition 
E)  Managing an inventory-to-asset ratio of 10% or higher 
A)  Experiencing negative cash flow 
B)  Not earning any revenue 
C)  Most vulnerable to failure 
D)  Facing strong competition 
E)  Managing an inventory-to-asset ratio of 10% or higher

Question 2

Seasonality is important because it affects which of the following:

Accepted Answer

A)  Product or service demand 
B)  Financial decisions 
C)  Key operations and decisions such as hiring 
D)  A & C 
E)  All of the above 
A)  Product or service demand 
B)  Financial decisions 
C)  Key operations and decisions such as hiring 
D)  A & C 
E)  All of the above

Question 3

In the build-up method, after you identify all your revenue sources, what is the next step?

Accepted Answer

A)  Identify all your costs 
B)  Think about how much revenue you can generate in a year 
C)  Determine operating expenses by the most appropriate time frame 
D)  Break down revenue into a typical day 
E)  Write a two- to three- page description of financial statements 
A)  Identify all your costs 
B)  Think about how much revenue you can generate in a year 
C)  Determine operating expenses by the most appropriate time frame 
D)  Break down revenue into a typical day 
E)  Write a two- to three- page description of financial statements

Question 4

Pro-forma financials often project sales occurring 5 years in the future.

Accepted Answer

A) True 
 B)False

Question 5

In financial analysis, the step that follows forecasting revenues and expenses is formulating a cash flow statement from those forecasts.

Accepted Answer

A) True 
 B)False

Question 6

What effect can selling on credit have on your business?

Accepted Answer

A)  Reduce assets 
B)  Decrease accounts payable 
C)  Delay cash inflows 
D)  Reduce liabilities 
E)  Increase inventory 
A)  Reduce assets 
B)  Decrease accounts payable 
C)  Delay cash inflows 
D)  Reduce liabilities 
E)  Increase inventory

Question 7

The standard term for most business plans is:

Accepted Answer

A)  2 years 
B)  4 years 
C)  5 years 
D)  8 years 
E)  Until the break-even date 
A)  2 years 
B)  4 years 
C)  5 years 
D)  8 years 
E)  Until the break-even date

Question 8

Which of the following can be used to strengthen your assumptions?

Accepted Answer

A)  Industry research 
B)  Competitor analysis 
C)  Own observations 
D)  Surveying customers 
E)  All of the above 
A)  Industry research 
B)  Competitor analysis 
C)  Own observations 
D)  Surveying customers 
E)  All of the above

Question 9

What does the Comparable Method help an entrepreneur to do?

Accepted Answer

A)  Estimate project cost 
B)  Research the industry 
C)  Benchmark competitors 
D)  Calculate operating expenses 
E)  Validate projections 
A)  Estimate project cost 
B)  Research the industry 
C)  Benchmark competitors 
D)  Calculate operating expenses 
E)  Validate projections

Question 10

If, after all calculations, your balance sheet does not balance, you should adjust retained earnings accordingly.

Accepted Answer

A) True 
 B)False

Question 11

An income statement will never include a line for:

Accepted Answer

A)  Depreciation 
B)  COGS 
C)  SG&A costs 
D)  Taxes on profits 
E)  Accounts payable 
A)  Depreciation 
B)  COGS 
C)  SG&A costs 
D)  Taxes on profits 
E)  Accounts payable

Question 12

Most pro-forma projections for new companies show monthly income figures for the first two years.

Accepted Answer

A) True 
 B)False

Question 13

Typically, a business begins to generate revenue within the first two months after it launches.

Accepted Answer

A) True 
 B)False

Question 14

Gross profit margin can be calculated by dividing the Cost of Goods Sold by Total Revenues.

Accepted Answer

A) True 
 B)False

It is critical to show the pro-forma projections on a monthly basis when a company is:

Seasonality is important because it affects which of the following:

In the build-up method, after you identify all your revenue sources, what is the next step?

Pro-forma financials often project sales occurring 5 years in the future.

In financial analysis, the step that follows forecasting revenues and expenses is formulating a cash flow statement from those forecasts.

What effect can selling on credit have on your business?

The standard term for most business plans is:

Which of the following can be used to strengthen your assumptions?

What does the Comparable Method help an entrepreneur to do?

If, after all calculations, your balance sheet does not balance, you should adjust retained earnings accordingly.

An income statement will never include a line for:

Most pro-forma projections for new companies show monthly income figures for the first two years.

Typically, a business begins to generate revenue within the first two months after it launches.

Gross profit margin can be calculated by dividing the Cost of Goods Sold by Total Revenues.

The Power of Entrepreneurship

The Entrepreneurial Process

Opportunity Recognition, Shaping, and Reshaping

Prototyping Your Ideas

Understanding Your Business Model and Developing Your Strategy

Entrepreneurial Marketing

Building the Founding Team

The Business Planning Process

Financing Entrepreneurial Ventures Worldwide

Raising Money for Starting and Growing Businesses

Debt and Other Forms of Financing

Legal and Tax Issues, Including Intellectual Property

Entrepreneurial Growth

Social Entrepreneurship

Filters

Exam 9: Building Your Pro Forma Financial Statements

It is critical to show the pro-forma projections on a monthly basis when a company is:

Seasonality is important because it affects which of the following:

In the build-up method, after you identify all your revenue sources, what is the next step?

Pro-forma financials often project sales occurring 5 years in the future.

In financial analysis, the step that follows forecasting revenues and expenses is formulating a cash flow statement from those forecasts.

What effect can selling on credit have on your business?

The standard term for most business plans is:

Which of the following can be used to strengthen your assumptions?

What does the Comparable Method help an entrepreneur to do?

If, after all calculations, your balance sheet does not balance, you should adjust retained earnings accordingly.

An income statement will never include a line for:

Most pro-forma projections for new companies show monthly income figures for the first two years.

Typically, a business begins to generate revenue within the first two months after it launches.

Gross profit margin can be calculated by dividing the Cost of Goods Sold by Total Revenues.

The Power of Entrepreneurship

The Entrepreneurial Process

Opportunity Recognition, Shaping, and Reshaping

Prototyping Your Ideas

Understanding Your Business Model and Developing Your Strategy

Entrepreneurial Marketing

Building the Founding Team

The Business Planning Process

Financing Entrepreneurial Ventures Worldwide

Raising Money for Starting and Growing Businesses

Debt and Other Forms of Financing

Legal and Tax Issues, Including Intellectual Property

Entrepreneurial Growth

Social Entrepreneurship

Filters