Chapter 9

Question 1

refers to the process of ascertaining whether organizational have been achieved if not why not and determining what activities should then be taken to achieve objective better in the future

Answer 1

Controlling

Question 2

steps in the control process

Answer 2

1. establishing performance objectives and standards
2. measuring actual performance
3. comparing actual performance to objective and standards
4. taking necessary action based on the results of the comparisons

Question 3

types of control

Answer 3

1. feedforward control
2. concurrent control
3. feed back control

Question 4

when management anticipates problems and prevents their occurrence, the type of control measure undertaken is called

Answer 4

feedforward control

Question 5

when operations are already ongoing and activities to detect variances are made concurrent control is said to be undertaken

Answer 5

concurrent control

Question 6

when information is gathered about a completed activity and in order that evaluation and steps for improvement are derived is undertaken

Answer 6

feedback control

Question 7

indicates the expenditures revenues or profits planned for some future period regarding operations

Answer 7

operating budget

Question 8

measures employee performance

Answer 8

performance appraisal

Question 9

pertain to those that contain data on various developments within the firm

Answer 9

statistical reports

Question 10

refer to the framework within which the objectives must be pursued

Answer 10

policies

Question 11

is a plan that describes the exact series of actions to be taken in a given situation

Answer 11

procedure

Question 12

strategic control systems

Answer 12

1. financial analysis
2. financial ratio analysis

Question 13

a review of the financial statements will reveal important details about the company’s performance

Answer 13

financial analysis

Question 14

under this method , one account appearing in the financial statement is paired with another to constitute ratio

Answer 14

financial ratio analysis

Question 15

financial ratios may be categorized into the following types

Answer 15

1. liquidity
2. efficiency
3. financial leverage
4. profitability

Question 16

these ratio assess the ability of a company to meet is current obligations

Answer 16

liquidity ratios

Question 17

this shows the extent to which current assets of the company can cover its current liabilities

Answer 17

current ratio

Question 18

this is a measure of the firm’s ability to pay off short-term obligations with the use of current assets and without relying on the sale of inventories

Answer 18

acid-test ratio

Question 19

these ratio show how effectively certain assets or liabilities are being used in the production of good and services

Answer 19

efficiency ratios

Question 20

this ratio measures the number of times an inventory is turned over (or sold) each year

Answer 20

inventory turnover ratio

Question 21

this ratio is used to measure utilization of the company investment in its fixed assets, such as its plant and equipment

Answer 21

fixed asset turnover

Question 22

this is a group of ratios designed to assess the balance of financing obtained through debt and equity sources

Answer 22

financial leverage ratios

Question 23

this ratio show how much of the firm’s assets are financed by debt

Answer 23

debt to total assets ratio

Question 24

this ratio measures the number of times that earnings before interest and taxes cover or exceed the company’s interest expense

Answer 24

time interest earned ratio

Question 25

these ratios measure how much operating income or net income a company is able to generate in relation to its assets owners equity and sales

Answer 25

profitability ratios

Question 26

this ratio compares the net profit to the level of sales

Answer 26

profit margin ratio

Question 27

this ratio shows how much income the company produces for every peso invested in assets

Answer 27

return on assets ratio

Question 28

this ratio measures the returns on the owners investment

Answer 28

return on equity ratio