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342 Managerial Finance > Chapter 2 Essentials > Flashcards

Chapter 2 Essentials Flashcards

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1
Q

Chapter 2 focuses on the what of a business?

A

Sizing Up

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2
Q

A size-up focuses on assessing the what and what of a business?

A

External Environment and Operation Decisions

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3
Q

SWOT Analaysis

A

Strength, Weaknesses, Opportunities, Threats

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4
Q

GDP

A

The sum of all goods and services produced in an economy

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5
Q

Includes assessing GDP, sector factors, inflation, interest rate, yield curve, stock conditions, etc.

A

Economy Size UP

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6
Q

Business Cycle

A

Gaps in actual output and capacity: Peak, Recession, Trough, Expansion

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7
Q

Recession

A

Two consecutive quarterly declines in real GDP

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8
Q

Inflation has had average of what but with wide fluctuations

A

3.3%

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9
Q

The what plots the different rates at which a government can borrow, with differing times to maturity

A

Yield Curve

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10
Q

Prior to recession the yield curve is often what?

A

Inverted

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11
Q

business cycle stage?
Relationship cycle and Busi rev?
Relationship cycle and Busi costs?
How important are changing interest rates?
current economy outlook?
Current interest rate outlook?
Easy to get financing?
Other variables that would affect?

A

Questions to Ask During an Economic Size-Up

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12
Q

Industry life cycle
Competitive environment
PEST Analysis

A

Industry Size Up Components

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13
Q

PEST Analysis

A

Political, Economic, Social, Technological

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14
Q

Key Outcomes of a Industry Size Up

A

Identify Key Industry Success Factors

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15
Q

1 start up
2 rapid growth
3 mature growth
4 stabilization/maturity
5 decline

A

Industry Life Cycle - Revenue Changes

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16
Q

Porter’s five forces governing competition and impacting profit margins

A

Intensity of Rivals, Threat of new Entrants, Bargaining Power of Customers, Threats of Substitutes, Bargaining Power of Suppliers

17
Q

Key to sustainable advantage

A

Low Cost or Differentiation

18
Q

Life cycle?
How profitable rn?
How competitive? 5 porters
Prospects for growth?
Key pest opportunities?
Key success factors in the industry?

A

Question to Ask During an Industry Size-Up

19
Q

Assuming customer demand is strong, to what extent is the firm able to fulfill that demand by providing the service or making the product available to the customer?

A

Supply Risk

20
Q

The 6 P’s of Operations

A

Product Quality, Process, Plant or Inventory, Parts or Inventory, People or Labour, Partners or Supply Network

21
Q
  • How important is quality to the customer?
  • how does the firm attempt to determine and deliver quality?
A

Product Quality

22
Q
  • what process does the firm currently employ?
  • how efficiently does it function?
  • how critical are tech innovation and investments?
A

Process

23
Q
  • What is the firm’s facility capacity?
  • how close is it to capacity?
A

Plant or Inventory

24
Q
  • what type of inventory do we have?
  • how much is required to meet demand?
  • where is it?
  • how do we manage it?
A

Parts or Inventory

25
Q
  • what skills do we need?
  • how skilledd are our current people?
  • what is our current environment?
A

People or Labour

26
Q
  • how well is the supply network configured?
  • how reliable and efficient is it?
A

Partners or Supply Network

27
Q

Assuming the firm is able to readily supply a product or service, to what extent is customer demand available?

A

Demand Risk

28
Q

The Four P’s of Marketing

A

Product, Price, Place, Promotion

29
Q

How important are The Who, what, where, when, and how of a purchase decision decides your what?

A

Target Market

30
Q

What are the products critical physical and intangible attributes

A

Product

31
Q

Is the product price appropriate relative to the competition?

A

Price

32
Q

Is the distribution channel appropriate?

A

Place

33
Q

Is the promotional campaign having a positive impact on potential buyers?

A

Promotion

34
Q
  • how would prospective lender or investors view the firm’s management?
  • does the current management team offer opportunities or present risk to the firm?
A

Sizing Up Human Resource

35
Q

Key Success Factors in HR and Management

A

Leadership, Character, Experience

36
Q
  • current management challenges?
  • are they being addressed?
  • firm strategy or focus?
  • firm key principles?
  • individual tech skills?
  • business experience?
  • leadership sills?
  • ownership authority?
  • management according to size and life stage?
  • character and intelligence of managers?
  • management depth or turnover?
  • overall strength and weaknesses of management?
A

Questions Related to HR and Strategy

37
Q

Conditions are ever changing and we want to preserve profit and highlight risks or needs

A

Size Up Relevance for Managers

342 Managerial Finance (10 decks)

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