Test 952

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Subject: Strategic Performance Management and Business Valuation

Total Number of Question: 40

Time: 41 Minutes

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The term "Goodwill" in business valuation represents:

Tangible assets B. Brand value and customer relationships C. Inventory levels D. Liabilities

Liabilities

The concept of "competitive advantage" was introduced by:

Peter Drucker

Michael Porter

Henry Mintzberg

Philip Kotler

Which of the following is an external factor in PEST analysis?

Employee skill levels

Company culture

Economic conditions

Internal audits

A company that pursues a differentiation strategy aims to:

Offer the lowest prices

Reduce product quality

Offer unique products that are valued by customers

Focus only on operational efficiency

Which metric is used to determine how efficiently a company is managing its assets to generate revenue?

Gross Margin

Asset Turnover Ratio

Debt Ratio

Quick Ratio

In valuation, which of the following is used to compare a firm's value to its earnings?

P/E Ratio

Net Profit Margin

Return on Equity

Price to Sales Ratio

Which of the following is considered an internal strategic factor?

Political environment

Competitor actions

Organizational culture

Economic conditions

In business valuation, "terminal value" refers to:

The value of assets at liquidation

The present value of all future cash flows beyond a forecast period

The value of debts

The value of inventory

Which of the following is an example of a financial synergy in mergers?

Improved management control

Economies of scale in production

Tax savings

Increased brand loyalty

10.

A company that focuses on cost leadership aims to:

Differentiate its products from competitors

Offer the lowest prices by reducing production costs

Increase product innovation

Target niche markets

11.

Which of the following methods is used for valuing companies in highly regulated industries?

Market approach

Discounted Cash Flow (DCF)

Asset-based valuation

Regulatory rate base approach

12.

The Quick Ratio is also known as:

Liquidity Ratio

Acid-Test Ratio

Solvency Ratio

Debt Ratio

13.

What is the main benefit of using scenario analysis in strategic planning?

Predicting the exact future outcome

Evaluating the potential impact of different situations

Reducing the need for financial forecasting

Ignoring uncertainties

14.

Which type of valuation uses comparable companies to determine value?

Market approach

Asset-based approach

DCF analysis

Venture capital method

15.

What is the primary focus of operational performance management?

Strategic planning

Day-to-day efficiency and productivity

Valuation of assets

Tax optimizatio

16.

A company's beta greater than 1 indicates:

The stock is less volatile than the market

The stock is more volatile than the market

The company has no risk

The company has high liquidity

17.

Which of the following is a leading indicator of business performance?

Profit Margin

Customer Satisfaction Scores

Return on Equity

Earnings per Share

18.

Which valuation method would be most appropriate for a mature company with stable cash flows?

Market multiples

Discounted Cash Flow (DCF)

Asset-based approach

Replacement cost approach

19.

A balanced scorecard includes which of the following perspectives?

Marketing, sales, production, financial

Financial, customer, internal business, learning and growth

Sales, operations, finance, and distribution

Strategic, tactical, operational, financial

20.

Which of the following best defines Return on Investment (ROI)?

Net profit as a percentage of total assets

Net profit as a percentage of sales

Net profit as a percentage of the investment made

Gross profit as a percentage of costs

21.

In strategic performance management, "benchmarking" refers to:

Comparing a company's performance with industry bests

Setting internal financial targets

Calculating profit margins

Reducing operational costs

22.

Which of the following represents the risk of not achieving the expected return on an investment?

Liquidity risk

Market risk

Default risk

Investment risk

23.

Which valuation method is often used for valuing natural resource companies?

Net Asset Value

Market Comparables

Discounted Cash Flow

Replacement Cost

24.

What is the primary objective of business valuation?

Determine the value of a business for sale, merger, or acquisition

Set marketing budgets

Calculate employee wages

Determine inventory levels

25.

Which of the following financial metrics is used to measure a company's profitability relative to its sales?

Return on Assets (ROA)

Gross Profit Margin

Debt-to-Equity Ratio D. Current Ratio

Current Rati

26.

Which of the following represents a company's ability to meet its short-term obligations?

Liquidity

Solvency

Profitability

Leverage

27.

Which type of valuation uses an analysis of past transactions involving similar companies to determine value?

Transaction Comparable Analysis

Asset-based approach

DCF analysis

Residual income approach

28.

The primary objective of strategic planning is to:

Increase product prices

Achieve long-term goals

Minimize taxes

Reduce employee turnover

29.

Which of the following is considered an intangible asset in business valuation?

Machinery

Patent

Inventory

Building

30.

The concept of "synergy" in mergers refers to:

The total value being less than the combined value of two companies

The increase in value resulting from merging two companies

The cost-saving strategies implemented after a merger

The reduction in workforce post-merger

31.

In performance management, "stretch targets" are

Easily achievable goals

Targets set below the average performance level

Ambitious goals intended to motivate employees

Short-term goals

32.

Which of the following is used to assess a company's long-term debt-paying ability?

Current Ratio

Debt-to-Equity Ratio

Gross Profit Margin

Price-to-Earnings Ratio

33.

Which type of risk is considered diversifiable?

Market risk

Systematic risk

Business risk

Interest rate risk

34.

What does the "Internal Rate of Return (IRR)" indicate?

The rate at which a company's sales grow

The interest rate that makes the net present value of a project zero

The profit margin on each product

The cost of capital for a project

35.

Which of the following is a commonly used profitability ratio?

Inventory Turnover

Net Profit Margin

Debt Ratio

Quick Ratio

36.

The "cost approach" in valuation focuses on:

The income-generating ability of the company

The replacement or reproduction cost of the assets

The stock market value

The value of intangible assets

37.

The concept of "core competency" was popularized by:

Michael Porter

Peter Drucker

Gary Hamel and C.K. Prahalad

Henry Mintzberg

38.

Which valuation approach is most sensitive to fluctuations in interest rates?

Market approach

Cost approach

Discounted Cash Flow (DCF)

Earnings multiple approach

39.

Which of the following is a key characteristic of Blue Ocean Strategy?

Competing in existing markets

Creating uncontested market space

Reducing the quality of products

Competing on price alone

40.

Which of the following ratios measures the financial leverage of a company?

Debt-to-Equity Ratio

Return on Assets (ROA)

Gross Profit Margin

Current Ratio

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