Competitive Advantage, Firm Performance, And Business Models

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Questions Bank

What Is Strategy
Strategic Leadership: Managing the Strategy Process
External Analysis: Industry Structure, Competitive Forces, and Strategic Groups
Internal Analysis: Resources, Capabilities, and Core Competencies
Competitive Advantage, Firm Performance, and Business Models
Business Strategy: Differentiation, Cost Leadership, and Blue Oceans
Business Strategy: Innovation, Entrepreneurship, and Platforms
Corporate Strategy: Vertical Integration and Diversification
Corporate Strategy: Strategic Alliances, Mergers and Acquisitions
Global Strategy: Competing Around the World
Organizational Design: Structure, Culture, and Control
Corporate Governance and Business Ethics

All Questions

Question 1

Free

Multiple Choice

Which of the following businesses is required by law to make its data available to the public?

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A restaurant owned and managed by an individual proprietor

A premium salon owned by two business partners

A carpet manufacturing unit runs solely by a third-generation entrepreneur

A software company with over 300 shareholders

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Question 2

Free

Multiple Choice

_____ precisely indicates how much of a firm's sales is converted into profits.

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Break-even price

Working capital turnover

Return on revenue

Inventory turnover

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Question 3

Free

Multiple Choice

Which of the following equations best expresses return on revenue?

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Net profits/Revenue

Revenue - Cost

Sales/Revenue

Revenue - Gross profits

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Question 4

Free

Multiple Choice

True Machine Inc.and One Electrona Inc.are two competing consumer electronics companies.While True Machine's COGS/Revenue is 66%, One Electrona's is 74%.What do you infer from this financial data?

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One Electrona has a competitive advantage over True Machine.

True Machine's profit margin is higher than that of One Electrona.

One Electrona is more efficient than True Machine by eight percentage points.

True Machine should focus more on driving down costs, while increasing revenues, and One Electrona should focus more on increasing its fixed asset turnover.

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Question 5

Free

Multiple Choice

A high percentage of R&D/Revenue ratio indicates a(n):

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strong focus on innovation to improve current products and services.

inefficiency in the management to focus on new products.

strong focus on marketing and sales to promote products and services.

negligent investment toward research and development.

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Question 6

Multiple Choice

_____ is best described as a measure of how effectively capital is being used by a firm to generate revenue.

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Return on revenue

Risk capital

Working capital turnover

Revenue per employee

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Question 7

Multiple Choice

The working capital turnover of Tesva Systems Corp.is 6.0.What does this financial data suggest?

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For every $6.00 Tesva Systems puts to work, the company incurs a cost of $1.00.

For every $6.00 Tesva Systems puts to work, the company realizes a sales of $1.00.

For every dollar Tesva Systems puts to work, the company realizes $6.00 in loss.

For every dollar Tesva Systems puts to work, the company realizes $6.00 of sales.

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Question 8

Multiple Choice

The working capital of a small home-based business is $200,000.The revenues generated account to $600,000, and the profits incurred are $300,000.What would be the company's working capital turnover?

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3, that is, $600,000/$200,000

$300,000, that is, $600,000 - $300,000

2, that is, $600,000/$300,000

$100,000, that is, $300,000 - $200,000

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Question 9

Multiple Choice

_____ most precisely measures how well a company leverages its fixed assets, particularly property, plant, and equipment (PPE).

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Working capital turnover

Fixed asset turnover

Fixed assets to equity ratio

Capital leverage ratio

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Question 10

Multiple Choice

The fixed asset turnover of a company is 8.3.What do you infer from this?

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Every dollar spent on the company's fixed assets generates $8.30 of revenue.

8.3% of the company's revenue is invested in fixed assets.

The return on fixed assets will break even in 8.3 years.

The cost of capital invested on fixed assets is 8.3% of the total profit.

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Question 11

Multiple Choice

Which of the following best expresses fixed asset turnover?

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Current assets/Fixed assets

Revenue/Fixed assets

Fixed assets/Total return to shareholders

Fixed assets/Current liabilities

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Question 12

Multiple Choice

Which of the following ratios best expresses inventory turnover?

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Inventory/Working capital

Annul profits/Inventory

Inventory/Per unit cost of production

Cost of goods sold/Inventory

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Question 13

Multiple Choice

_____ indicates how fast a firm is collecting the credit amount extended by a firm to its customers.

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Payables turnover

Receivables turnover

Assets turnover

Inventory turnover

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Question 14

Multiple Choice

_____ indicates how much a firm benefits from interest-free loans extended by its suppliers and creditors.

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Payables turnover

Receivables turnover

Assets turnover

Inventory turnover

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Question 15

Multiple Choice

The payable turnover for Apple and BlackBerry (as of fiscal year 2012)was 7.4 and 24.8 respectively.From this data we can conclude that:

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BlackBerry has taken a longer time to pay its creditors as compared to Apple.

Apple has been more efficient than Blackberry in paying creditors and generating interest-free loans from suppliers.

BlackBerry has a clear advantage over Apple as its credits are paid much faster than that of Apple.

BlackBerry can extend its payment periods, while Apple is required to pay its creditors more quickly.

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Question 16

Multiple Choice

The receivables turnover of GD Products Inc.is 13.6 and that of its competitor, AP Goods Inc., is 6.0.What does this financial data primarily imply?

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GD Products is less efficient than AP Goods in collecting accounts receivables.

AP Goods pays its creditors more quickly as compared to GD Products.

GD Products collects accounts receivables faster than what AP Goods does.

AP Goods has a larger value gap as compared to GD Products.

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Question 17

Multiple Choice

In the fiscal year 2012, BlackBerry's Cost of goods sold (COGS)/Revenue ratio was higher than that of its competitor, Apple.This implies that BlackBerry needs to work toward:

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driving down its costs.

lowering its inventory turnover.

increasing its fixed costs and decreasing its variable costs.

reducing its return on revenue.

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Question 18

Multiple Choice

Which of the following statements is true of accounting data?

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Accounting data focus mainly on intangible assets, rather than tangible assets.

Accounting data are historical data and thus backward-looking.

Accounting data do not have to be adjusted in any manner to compare companies with different capital structures.

Accounting data consider off-balance sheet items, such as pension obligations of a firm.

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Question 19

Multiple Choice

Which of the following competitively important assets is typically excluded from a firm's balance sheet?

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Land and building

Accounts payable

Patents

Customer experience

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Question 20

Multiple Choice

_____ are the legal owners of public companies.

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Employees

Shareholders

Category captains

Creditors

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