Description
Week 10: Interactive Learning Activity
10.1 Learning Outcomes:
Understand the importance of preparing a financial plan.
Describe how to prepare financial statements and use them to manage the small business
Create projected financial statements.
Understand the basic financial statements through ratio analysis.
Explain how to interpret financial ratios
Conduct a break-even analysis for a small company.
Explain the importance of cash management to the success of the small business.
Differentiate between cash and profits.
Understand the five steps in creating a cash budget and use them to build a cash budget.
Describe fundamental principles involved in managing the “Big Three” of cash management: accounts receivable, accounts payable, and inventory.
Explain how bootstrapping can help a small business avoid a cash crunch.
10.2 Action Required:
The following table shows the questions.
Questions
True
False
The balance sheet provides owners with an estimate of the firm’s worth for a specific moment in time.
The cost of goods sold represents the total cost, including distribution, of the goods sold during the year.
The objectives of cash management are to adequately meet the cash demands of the business and to avoid retaining unnecessarily large cash balances.
Usually, trade credit from vendors is expensive, and small business owners should avoid it.
10.3 Test your Knowledge (Question):
Answer with a tick mark or write in words which is true, and which one is false.
10.4 Instructions
Answer the question available in the “Test your Knowledge” section.
Post your answer in the discussion board using the discussion link below
(( PLEASE USE YOUR OWN WORDS AND WRITE THE REFERENCE))
