Introduction to Business

Final Exam Prep

Section A

Question 1

a) What are the three basic financial statements that a firm would produce at the end of its
financial year? (3marks)

b) What major information does each of the financial statement named in (a) contain?

(6 marks)

c) Company XYZ reports the following data on December 31st 2017 financial statements:

 Gross Sales $ 275,000.00

 Current Assets $ 80,000.00

 Long term Assets $ 260,000.00

 Current Liabilities $ 40,000.00

 Long term Liabilities $ 92,000.00

 Owners’ Equity $ 165,000.00

 Net Income $ 15,600.00

Compute the following: (12 marks)

I. Current Ratio (3 marks)

II. Debt to-Equity Ratio (3 marks)

III. Return on Sales (3 marks)

IV. Return on Owners’ Equity (3 marks)

d) Use each answers from your ratios computation and explain how each will allow the manager of
Company XYZ to monitor his efficiency and effectiveness. (8 marks)

e) Define Gross sales and Current assets. (4 marks)

 f) The manager of Company XYZ is considering financing an extension of the business, list four
ways in which he is able to raise the funds. (4 marks)

g) Should Company XYZ decide to Market its products abroad, list three factors it would have to
consider? (3 marks)

Section B

Question 2:

a) Describe the different types of economic systems according to the means by which they control
the factors of production. (10 marks)

b) What is GDP and what does it measure? (2 marks)

c) How is GDP different from GNP? (2 marks)

d) Explain the difference between two of the four degrees of competition and give an example of
each. (6 marks)

Question 3:

a) Describe the development and explain the importance of corporate culture. (10 marks)

b) What are five (5) basic management skills? (5 marks)

c) Explain how one of these skills would be used by a manager to effectively communicate the
culture and manage change. (5 marks)

Question 4:
a) Identify and describe the three basic steps to strategy formulation. (10 marks)

b) What are four main purpose of setting goals in an organization? (10 marks)