C201 BUSINESS ACUMEN UPDATED STUDY EXAMS
QUESTIONS AND ANSWERS GUARANTEE A+
✔✔Product/service leadership - ✔✔Innovation based strategy, product development,
market exploitation, best products, better ideas, commercialize faster
✔✔Customer intimacy - ✔✔Solution-based strategy, creating results for customers by
building bonds to build loyalty
✔✔Market position - ✔✔Star: high market share high growth potential, use cash,
sustained growth, high profit
Question mark: low market share hi market growth, use cash ability to generate profit is
unknown because low market share
Dog: Low market share low market growth, uses cash from other segments
Cash cow: hi market share low market growth, cash used to develop businesses and
other segments, such as question mark's
✔✔Business life cycle - ✔✔Start up, growth, mature, decline
✔✔Start up lifecycle - ✔✔New, little to no policies, focus on obtaining capital, marketing
products, initial sales, cash conservation
✔✔Growth life cycle - ✔✔Focus on growing sales, increasing the distribution and
Efficiently produce products to meet demand, begin standardizing procedures policies
✔✔Mature business lifecycles - ✔✔Focus on maintaining marketshare, improving
productivity, reduce costs, improvements to products are evolutionary, greater amounts
of cash on hand
✔✔Decline business lifecycle - ✔✔Revenues are declining, decide to reinvest, create
new, or maximize profits with current products
✔✔Linking business strategy and comp strategy - ✔✔Should be aligned with rewards
strategy, HR strategy business strategy and comp strategy, comp is often large
percentage of operating cost
✔✔Elements of comp plan directly influenced by org bsns strategy - ✔✔Investment in
resources, fixed and variable comp, market competitive posture
✔✔Investment in resources - ✔✔Bottom line directly related to investing in HR
resources including comp resources. Bottom line increases = more comp and HR
resources. Willing to invest more If high return predicted
✔✔Fixed and variable comp - ✔✔The mix may be impacted by bottom line
, ✔✔Market competitive posture - ✔✔The bottom line determines position in the market.
Market median or market upper quartile, lead, lag, lead lag
✔✔Why do orgs use financial reports - ✔✔Standardize data across companies and
industries, promote consistency of financial communication, provide information to Key
constituents(leaders, managers, shareholders, lenders, govt)
✔✔Types of financial reports - ✔✔Annual report - shows 12 mos result, called the
school year, sometimes matches calendar year sometimes not. Quarterly report - shows
basic financial results for three months. Compares to previous year same quarter and
cumulative comparables, not as detailed
✔✔Types of financial statements - ✔✔Balance sheet, income statement, cash flow
statement
✔✔Balance sheet - ✔✔Statement of financial position as specific date, list whats
owned, what's owed, equity of entity. Shows book value of company, represents
financial health
✔✔Income statement - ✔✔Covers a period of time, shows revenues earned, expenses
incurred. Shows profitability
✔✔Cash flow statement - ✔✔Explains change during period in cash and cash
equivalents, comprehensive view of the company's financial situation
✔✔Sources of capital - ✔✔Profit - money that comes from sales. Equity - money that
investors pay to own a share of business. Debt - money that is borrowed usually in
loans or notes
✔✔Profit measures - ✔✔Revenue, gross profit, EBIT, EBITDA, net income, EPS,
growth and margin
✔✔Revenue - ✔✔Volume x price, The top line on a starting point of an orgs income
✔✔Gross profit - ✔✔Revenue-cost of goods sold, how much the Org earns from each
unit
✔✔EBIT - ✔✔Gross profit minus expenses, earnings before interest and taxes, also
called operating profit, how much the Org earns before financing the business
✔✔EBITDA - ✔✔EBIT+depreciation+amortization, same as EBIT but adds annual
charge from previous captl investments, often largest non-cash expense, indicative of
real cash generated by business
QUESTIONS AND ANSWERS GUARANTEE A+
✔✔Product/service leadership - ✔✔Innovation based strategy, product development,
market exploitation, best products, better ideas, commercialize faster
✔✔Customer intimacy - ✔✔Solution-based strategy, creating results for customers by
building bonds to build loyalty
✔✔Market position - ✔✔Star: high market share high growth potential, use cash,
sustained growth, high profit
Question mark: low market share hi market growth, use cash ability to generate profit is
unknown because low market share
Dog: Low market share low market growth, uses cash from other segments
Cash cow: hi market share low market growth, cash used to develop businesses and
other segments, such as question mark's
✔✔Business life cycle - ✔✔Start up, growth, mature, decline
✔✔Start up lifecycle - ✔✔New, little to no policies, focus on obtaining capital, marketing
products, initial sales, cash conservation
✔✔Growth life cycle - ✔✔Focus on growing sales, increasing the distribution and
Efficiently produce products to meet demand, begin standardizing procedures policies
✔✔Mature business lifecycles - ✔✔Focus on maintaining marketshare, improving
productivity, reduce costs, improvements to products are evolutionary, greater amounts
of cash on hand
✔✔Decline business lifecycle - ✔✔Revenues are declining, decide to reinvest, create
new, or maximize profits with current products
✔✔Linking business strategy and comp strategy - ✔✔Should be aligned with rewards
strategy, HR strategy business strategy and comp strategy, comp is often large
percentage of operating cost
✔✔Elements of comp plan directly influenced by org bsns strategy - ✔✔Investment in
resources, fixed and variable comp, market competitive posture
✔✔Investment in resources - ✔✔Bottom line directly related to investing in HR
resources including comp resources. Bottom line increases = more comp and HR
resources. Willing to invest more If high return predicted
✔✔Fixed and variable comp - ✔✔The mix may be impacted by bottom line
, ✔✔Market competitive posture - ✔✔The bottom line determines position in the market.
Market median or market upper quartile, lead, lag, lead lag
✔✔Why do orgs use financial reports - ✔✔Standardize data across companies and
industries, promote consistency of financial communication, provide information to Key
constituents(leaders, managers, shareholders, lenders, govt)
✔✔Types of financial reports - ✔✔Annual report - shows 12 mos result, called the
school year, sometimes matches calendar year sometimes not. Quarterly report - shows
basic financial results for three months. Compares to previous year same quarter and
cumulative comparables, not as detailed
✔✔Types of financial statements - ✔✔Balance sheet, income statement, cash flow
statement
✔✔Balance sheet - ✔✔Statement of financial position as specific date, list whats
owned, what's owed, equity of entity. Shows book value of company, represents
financial health
✔✔Income statement - ✔✔Covers a period of time, shows revenues earned, expenses
incurred. Shows profitability
✔✔Cash flow statement - ✔✔Explains change during period in cash and cash
equivalents, comprehensive view of the company's financial situation
✔✔Sources of capital - ✔✔Profit - money that comes from sales. Equity - money that
investors pay to own a share of business. Debt - money that is borrowed usually in
loans or notes
✔✔Profit measures - ✔✔Revenue, gross profit, EBIT, EBITDA, net income, EPS,
growth and margin
✔✔Revenue - ✔✔Volume x price, The top line on a starting point of an orgs income
✔✔Gross profit - ✔✔Revenue-cost of goods sold, how much the Org earns from each
unit
✔✔EBIT - ✔✔Gross profit minus expenses, earnings before interest and taxes, also
called operating profit, how much the Org earns before financing the business
✔✔EBITDA - ✔✔EBIT+depreciation+amortization, same as EBIT but adds annual
charge from previous captl investments, often largest non-cash expense, indicative of
real cash generated by business
