Business Questions

1. Distinguish among (a) gross profits, (b) operating profits, and (c) net profits.

2. What questions do financial ratios help answer about a firm’s financial performance?

3. Discuss how asset and financing requirements might differ among a retail business, a service company, and an information system-based venture.

4. Describe the process for estimating the amount of assets required for a new venture.

5. How does the nature of a business affect its sources of financing?

6. Explain the three trade-offs that guide the choice between debt financing and equity financing.

7. Why is a small business potentially in a better position to achieve customer satisfaction than a large firm?

8. Briefly describe the four stages of the consumer decision-making process. Why is the first stage so vital to consumer behavior?

9. How does price relate to value in the eyes of a customer?

10. If a firm has fixed costs of $100,000 and variable costs per unit of $1, what is the break-even point in units, assuming a selling price of $5 per unit?

11. Discuss the advantages and disadvantages of each approach to budgeting funds for promotion.

12. What are some nonfinancial rewards that could be offered to salespeople?