Entrepreneurship Exam 4 Questions and Answers Latest Update 2025 Graded A+
cash - Answers the energy that keeps your business flowing
lifeblood of the business
cash flow statement - Answers financial report that shows the money coming into and going out of an
organization
income statement - Answers shows you what the situation is with sales and profits over time
balance sheet - Answers snapshot of your business
_______ and _______ are not the same - Answers cash, profit
negative cash balance - Answers never have it
means that you are overdrawn in one or more of your bank accounts
rules to keep cash flowing - Answers 1. Collect cash as soon as possible
2. pay your bills by the due date, not earlier
3. check on your available cash every day
4. Lease or finance instead of buying equipment, where practical
5. avoid buying inventory that you do not need
noncash expenses - Answers adjustments to asset values not involving cash, such as depreciation
working capital - Answers the value of current assets minus current liabilities
having a positive working capital is where it's at
cash flow cycles - Answers the length of the cycle, amount of cash involved, and upfront cash outlays will
differ from business to business
Cash Flow Equation - Answers cash on hand + cash receipts - cash disbursements
inflows and outflows of cash are divided into 3 categories: - Answers 1. Operations
2. Investment
, 3. Financing
two steps to forecasting cash flow receipts: - Answers 1. project cash receipts from all possible sources
2. subtract expenditures that would need to be deducted to meet this level of cash receipts
3 primary controllable factors in cash availability: - Answers 1. managing the level of inventory on hand
2. managing receivables to generate prompt payment
3. managing accounts payable
risks involved with inventory: - Answers 1. storage costs
2. pilferage
pilferage - Answers theft of inventory
what is one way to free up cash - Answers reducing inventory
aging schedule - Answers a tool that companies employ to manage their receivables
a fundamental rule if you are extending credit to your customers: - Answers if you don't ask, you won't
get
factoring (receivables financing) - Answers accessing cash for your business in exchange for offering a
company the rights to the cash that will be collected from your customers
credit - Answers the ability to borrow money
capital assets - Answers fixed assets or earning assets
capital budgeting - Answers help you understand the cash flow required for investments and the
expected impact on operating cash flows
burn rate - Answers the pace at which a company must spend capital before generating positive cash
flow
number of months before cash runs out = (cash available + revenue)/negative cash outflow per month
FV=PV (1+i)^ n - Answers FV = future value of the investment
PV = present value or amount invested today
i = interest rate per compounding period in decimal form
n = the number of compounding periods
cash - Answers the energy that keeps your business flowing
lifeblood of the business
cash flow statement - Answers financial report that shows the money coming into and going out of an
organization
income statement - Answers shows you what the situation is with sales and profits over time
balance sheet - Answers snapshot of your business
_______ and _______ are not the same - Answers cash, profit
negative cash balance - Answers never have it
means that you are overdrawn in one or more of your bank accounts
rules to keep cash flowing - Answers 1. Collect cash as soon as possible
2. pay your bills by the due date, not earlier
3. check on your available cash every day
4. Lease or finance instead of buying equipment, where practical
5. avoid buying inventory that you do not need
noncash expenses - Answers adjustments to asset values not involving cash, such as depreciation
working capital - Answers the value of current assets minus current liabilities
having a positive working capital is where it's at
cash flow cycles - Answers the length of the cycle, amount of cash involved, and upfront cash outlays will
differ from business to business
Cash Flow Equation - Answers cash on hand + cash receipts - cash disbursements
inflows and outflows of cash are divided into 3 categories: - Answers 1. Operations
2. Investment
, 3. Financing
two steps to forecasting cash flow receipts: - Answers 1. project cash receipts from all possible sources
2. subtract expenditures that would need to be deducted to meet this level of cash receipts
3 primary controllable factors in cash availability: - Answers 1. managing the level of inventory on hand
2. managing receivables to generate prompt payment
3. managing accounts payable
risks involved with inventory: - Answers 1. storage costs
2. pilferage
pilferage - Answers theft of inventory
what is one way to free up cash - Answers reducing inventory
aging schedule - Answers a tool that companies employ to manage their receivables
a fundamental rule if you are extending credit to your customers: - Answers if you don't ask, you won't
get
factoring (receivables financing) - Answers accessing cash for your business in exchange for offering a
company the rights to the cash that will be collected from your customers
credit - Answers the ability to borrow money
capital assets - Answers fixed assets or earning assets
capital budgeting - Answers help you understand the cash flow required for investments and the
expected impact on operating cash flows
burn rate - Answers the pace at which a company must spend capital before generating positive cash
flow
number of months before cash runs out = (cash available + revenue)/negative cash outflow per month
FV=PV (1+i)^ n - Answers FV = future value of the investment
PV = present value or amount invested today
i = interest rate per compounding period in decimal form
n = the number of compounding periods
