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Commerce and BusinessbackBusinessbackStrategic ManagementbackStrategic ManagementbackPractice Set 2476back

Competitive Advantage,firm Performance,and Business Models

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Question 1
Free
Multiple Choice

The three financial ratios that constitute return on revenue are Cost of goods sold/Revenue,Research & Development expense/Revenue,and

Choose correct answer/s
A

Accounting profitability/Revenue.

B

Economic value created/Revenue.

C

Total return to shareholders/Revenue.

D

Selling, general, & administrative expense/Revenue.

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Question 2
Free
Multiple Choice

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

Choose correct answer/s
A

Break-even price

B

Working capital turnover

C

Return on revenue

D

Inventory turnover

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Question 3
Free
Multiple Choice

The ratio Cost of goods sold/Revenue indicates how efficiently a company can

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A

produce a good.

B

sell a good.

C

advertise a good.

D

design a good.

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Question 4
Free
Multiple Choice

Apple Watch retailed for $349 in 2015,and the firm was predicted to sell millions of units.The firm's total cost in terms of materials and labor for the Apple Watch was no more than $84.Thus,Apple's profit for each watch sold is an estimated $265,with a profit margin of _____ percent.

Choose correct answer/s
A

215

B

265

C

315

D

365

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Question 5
Free
Multiple Choice

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

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A

strong focus on innovation to improve current products and services.

B

inefficiency in the management to focus on new products.

C

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

D

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.

Choose correct answer/s
A
Return on revenue
B
Risk capital
C
Working capital turnover
D
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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A
For every $6.00 Tesva Systems puts to work, the company incurs a cost of $1.00.
B
For every $6.00 Tesva Systems puts to work, the company realizes sales of $1.00.
C
For every dollar Tesva Systems puts to work, the company realizes $6.00 in loss.
D
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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A
3, that is, $600,000/$200,000
B
$300,000, that is, $600,000 - $300,000
C
2, that is, $600,000/$300,000
D
$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).

Choose correct answer/s
A
Working capital turnover
B
Fixed asset turnover
C
Fixed assets to equity ratio
D
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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A
Every dollar spent on the company's fixed assets generates $8.30 of revenue.
B
8.3% of the company's revenue is invested in fixed assets.
C
The return on fixed assets will break even in 8.3 years.
D
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?

Choose correct answer/s
A
Current assets/Fixed assets
B
Revenue/Fixed assets
C
Fixed assets/Total return to shareholders
D
Fixed assets/Current liabilities
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Question 12
Multiple Choice

Which of the following ratios best expresses inventory turnover?

Choose correct answer/s
A
Inventory/Working capital
B
Annul profits/Inventory
C
Inventory/Per unit cost of production
D
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.

Choose correct answer/s
A
Payables turnover
B
Receivables turnover
C
Assets turnover
D
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.

Choose correct answer/s
A
Payables turnover
B
Receivables turnover
C
Assets turnover
D
Inventory turnover
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Question 15
Multiple Choice

In 2014,Apple had a return on revenue of 29.3 percent,and Microsoft had a return on revenue of 32 percent.Even so,Apple had a higher return on invested capital than Microsoft.Why did this happen?

Choose correct answer/s
A
Apple had a higher cost structure than Microsoft.
B
Apple was able to charge a much higher margin for its products and services than Microsoft.
C
Apple spent more on research and development and marketing and sales than Microsoft.
D
Apple had a much higher selling, general, and administrative expense that Microsoft.
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Question 16
Multiple Choice

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

Choose correct answer/s
A
VK Products is less efficient than DL Goods in collecting accounts receivables.
B
DL Goods pays its creditors more quickly as compared to VK Products.
C
VK Products collects accounts receivables faster than AP Goods does.
D
DL Goods has a larger value gap as compared to VK Products.
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Question 17
Multiple Choice

In 2014,Apple turned over its inventory more than 53 times.In stark contrast,Microsoft turned over its inventory only about 10 times during the year.Which of the following best explains this difference?

Choose correct answer/s
A
Apple had a more effective management of its global supply chain than Microsoft.
B
Microsoft had a stronger demand for its tablet computer than Apple did for its tablet computer.
C
Apple operated its own production facilities and therefore had lower production costs than Microsoft.
D
Microsoft had production facilities in countries with lower production costs than Apple.
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Question 18
Multiple Choice

Which of the following statements is true of accounting data?

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A
Accounting data focus mainly on intangible assets, rather than tangible assets.
B
Accounting data are historical data and thus backward-looking.
C
Accounting data do not have to be adjusted in any manner to compare companies with different capital structures.
D
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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A
land and building
B
accounts payable
C
patents
D
customer experience
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Question 20
Multiple Choice

_____ are the legal owners of public companies.

Choose correct answer/s
A
Employees
B
Shareholders
C
Category captains
D
Creditors
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