Chapter 1

Question 1

Acid test ratio and recommended ratio.

Answer 1

Current assets - stock:current liabilities
Should be 1:1

Question 2

Solvency test and recommended ratio

Answer 2

Total assets:total liability
Should be 2:1

Question 3

9 business functions (micro environment)

Answer 3

1. general management
2. risk management
3. financial
4. administration
5. human resources
6. public relations
7. purchasing
8. production
9. marketing

Question 4

Porters six forces ( market environment)

Answer 4

1. power of buyer
2. power of supplier
3. availabillity of complamentary products
4. availability of subsitute products
5. level of rivalry
6. threat of new entrants

Question 5

PESTLE ( macro environment)

Answer 5

poliyical
economical
social
technilogical
legislative/legal
environmental