MBA 705 MINSUN KIM EXAM 1 PRACTICE AND
REVIEW MATERIAL WITH INTRODUCTION TO
CORPORATE STRATEGY
◉ Large Businesses.
Answer: Often benefit from economies of scale, greater financial
resources, stronger brand recognition, and more bargaining power.
◉ Mid-Size Businesses.
Answer: May struggle because they may lack both flexibility and
scale advantages.
◉ Global Strategy Concerns.
Answer: Whether a business should use the same strategy
everywhere or adapt strategy by country.
◉ Functional Strategies.
Answer: The lowest level of strategy that supports the overall
business strategy.
◉ Marketing Strategy.
Answer: Should align with the company's business strategy.
,◉ Finance Strategy.
Answer: Depends on business strategy.
◉ Low-cost businesses.
Answer: Businesses that minimize financial costs and avoid
expensive capital when possible.
◉ Differentiated businesses.
Answer: Businesses that may spend more on quality improvements
and accept higher capital costs if they support differentiation.
◉ Financial Ratio Analysis.
Answer: A method used to evaluate company performance through
various ratios.
◉ Current Ratio.
Answer: Measures whether current assets can cover current
liabilities; a 2:1 ratio or better is often desirable.
◉ Quick Ratio / Acid Test.
Answer: Measures how quickly a company can generate cash on
short notice.
, ◉ Asset Turnover.
Answer: Measures how efficiently total assets generate sales.
◉ Inventory Turnover.
Answer: Shows how many times inventory is sold during the year.
◉ Sales-to-Working Capital.
Answer: Measures how efficiently net working capital is used to
generate sales.
◉ Debt-to-Asset Ratio.
Answer: Shows the percentage of assets financed by borrowed
funds.
◉ Debt-to-Equity Ratio.
Answer: Compares creditor financing to owner financing.
◉ Long-Term Debt-to-Equity Ratio.
Answer: Compares long-term creditor financing to owner financing.
◉ Gross Profit Margin.
REVIEW MATERIAL WITH INTRODUCTION TO
CORPORATE STRATEGY
◉ Large Businesses.
Answer: Often benefit from economies of scale, greater financial
resources, stronger brand recognition, and more bargaining power.
◉ Mid-Size Businesses.
Answer: May struggle because they may lack both flexibility and
scale advantages.
◉ Global Strategy Concerns.
Answer: Whether a business should use the same strategy
everywhere or adapt strategy by country.
◉ Functional Strategies.
Answer: The lowest level of strategy that supports the overall
business strategy.
◉ Marketing Strategy.
Answer: Should align with the company's business strategy.
,◉ Finance Strategy.
Answer: Depends on business strategy.
◉ Low-cost businesses.
Answer: Businesses that minimize financial costs and avoid
expensive capital when possible.
◉ Differentiated businesses.
Answer: Businesses that may spend more on quality improvements
and accept higher capital costs if they support differentiation.
◉ Financial Ratio Analysis.
Answer: A method used to evaluate company performance through
various ratios.
◉ Current Ratio.
Answer: Measures whether current assets can cover current
liabilities; a 2:1 ratio or better is often desirable.
◉ Quick Ratio / Acid Test.
Answer: Measures how quickly a company can generate cash on
short notice.
, ◉ Asset Turnover.
Answer: Measures how efficiently total assets generate sales.
◉ Inventory Turnover.
Answer: Shows how many times inventory is sold during the year.
◉ Sales-to-Working Capital.
Answer: Measures how efficiently net working capital is used to
generate sales.
◉ Debt-to-Asset Ratio.
Answer: Shows the percentage of assets financed by borrowed
funds.
◉ Debt-to-Equity Ratio.
Answer: Compares creditor financing to owner financing.
◉ Long-Term Debt-to-Equity Ratio.
Answer: Compares long-term creditor financing to owner financing.
◉ Gross Profit Margin.
