Question

1.Revenue grew from $34,000 in January to $42,000 in February. What is the revenue growth rate?

0.24

23.5%

0.19

19.0%

2.The landlord for WPF Consulting has proposed raising the monthly rent from $2,500 to $3,000 citing the increased costs of operating the building. What is rental rate percentage change is the landlord proposing?

20%

16.7%

10%

8.33%

3.A sales and marketing strategy is a characteristic of an operational-centric business.

True

False

4.Inventory is a use of cash.

True

False

5.Bill paying ability over the next year is often measured using:

Profitability ratios

Leverage ratios

Liquidity ratios

Efficiency ratios

6.How much profit a business makes on each sale can be measured using:

Return on investment

Operating margin

Inventory turnover

Gross margin

7.The cash needs of a business can be reduced by:

Increasing percentage change

Reducing days in inventory

Decreasing gross margin

Reducing inventory turnover

8.When growing a business, working capital will always increase when:

Gross margin increases

The efficiency ratios increase

Inventory turnover increases

Current assets increase more than current liabilities

9.Companies can become more profitable by improving their:

Gross margin

Cash collection cycle

Inventory turnover

All of the above

10.As the old saying goes, cash is ______.

(fill in blank)

Answer 1

1) Revenue grew from $34,000 in January to $42,000 in February.

Revenue growth rate = Change in revenue / previous period revenue

Change in revenue = Feb month revenue - Jan month revenue

= 42,000 - 34,000

= $ 8000

Revenue growth rate = 8000 / 34000

= 0.2353 (approx)

or 23.53 %

Correct answer is 2nd one.

2) Rent is to be increated from $2,500 to $3,000.

Change in rent = 3000 - 2500 = 500 $

% Change in rental rate =( Change in rent / Previous rent ) * 100

= (500 / 2500) * 100

= 0.2 * 100

= 20 %

Rental rate percentage change is the landlord proposing = 20 %

Hope it helps!