BUSI 690 HISTORICAL FINANCIAL
ANALYSIS PRACTICE EXAMINATION 2026
QUESTIONS WITH ANSWERS GRADED A+
◍ Understanding the Resource Allocation Process (RAP) will have large
effects on shaping a firm's realized strategy. Which of the following is an
example of such an allocation of resources?.
Answer: Intel's rule to "maximize margin-per-wafer-start"
◍ What are the main forms of business organization?.
Answer: Sole proprietorships, partnerships, and corporations.
◍ What is the primary goal of public companies?.
Answer: Stockholder wealth maximization, which translates to stock price
maximization.
◍ What is a sole proprietorship?.
Answer: A business owned by one individual, easily formed with few
regulations.
◍ What is wrong with the following statement? "Intended strategies tend to be
generated from a bottom up approach.".
Answer: Intended strategies are generated from a top down approach.
◍ The objective of Porter's five forces model is to:.
Answer: Assess the potential for profits within an industry
◍ From an accounting profitability perspective, competitive advantage is
achieved by the firm that does which of the following?.
Answer: Delivers the most positive profitability metrics.
◍ Derivative markets.
Answer: derived from changes in the prices of other assets
, ◍ Strategic group mapping tells us that:.
Answer: competitive pressures in an industry favor some strategic groups
while threatening others
◍ One way that a firm can create a sustainable competitive advantage is by:.
Answer: Managing value chain activities better than its rivals.
◍ What is the impact of an efficient market?.
Answer: Securities are normally in equilibrium and fairly priced, reflecting
all relevant information.
◍ What is the formula for shareholder wealth?.
Answer: Shareholder wealth = Number of shares outstanding × Market price
per share.
◍ The never-ending cycle of analysis, formulation, implementation and
feedback is called what?.
Answer: The strategic management process.
◍ What is EBITDA?.
Answer: Earnings Before Interest, Taxes, Depreciation, and Amortization;
calculated as Sales - cost of sales - other operating expenses.
◍ According to Michael Porter, when it comes to a firm's value chain activities
and the essence of strategy a firm should ask itself:.
Answer: Which activities should be done and more importantly what should
not be done?
◍ The term "strategy" has grown in usage in a variety of fields today. Which
of the following is the best use of the term for this course?.
Answer: The firm's efforts to gain and sustain competitive advantage.
◍ Physical Assets.
Answer: Physical asset markets (also called "tangible" or "real" asset
markets) are for products such as wheat, autos, real estate, computers, and
machinery.
◍ Industry structures are not stable over time. The U.S. banking industry has
ANALYSIS PRACTICE EXAMINATION 2026
QUESTIONS WITH ANSWERS GRADED A+
◍ Understanding the Resource Allocation Process (RAP) will have large
effects on shaping a firm's realized strategy. Which of the following is an
example of such an allocation of resources?.
Answer: Intel's rule to "maximize margin-per-wafer-start"
◍ What are the main forms of business organization?.
Answer: Sole proprietorships, partnerships, and corporations.
◍ What is the primary goal of public companies?.
Answer: Stockholder wealth maximization, which translates to stock price
maximization.
◍ What is a sole proprietorship?.
Answer: A business owned by one individual, easily formed with few
regulations.
◍ What is wrong with the following statement? "Intended strategies tend to be
generated from a bottom up approach.".
Answer: Intended strategies are generated from a top down approach.
◍ The objective of Porter's five forces model is to:.
Answer: Assess the potential for profits within an industry
◍ From an accounting profitability perspective, competitive advantage is
achieved by the firm that does which of the following?.
Answer: Delivers the most positive profitability metrics.
◍ Derivative markets.
Answer: derived from changes in the prices of other assets
, ◍ Strategic group mapping tells us that:.
Answer: competitive pressures in an industry favor some strategic groups
while threatening others
◍ One way that a firm can create a sustainable competitive advantage is by:.
Answer: Managing value chain activities better than its rivals.
◍ What is the impact of an efficient market?.
Answer: Securities are normally in equilibrium and fairly priced, reflecting
all relevant information.
◍ What is the formula for shareholder wealth?.
Answer: Shareholder wealth = Number of shares outstanding × Market price
per share.
◍ The never-ending cycle of analysis, formulation, implementation and
feedback is called what?.
Answer: The strategic management process.
◍ What is EBITDA?.
Answer: Earnings Before Interest, Taxes, Depreciation, and Amortization;
calculated as Sales - cost of sales - other operating expenses.
◍ According to Michael Porter, when it comes to a firm's value chain activities
and the essence of strategy a firm should ask itself:.
Answer: Which activities should be done and more importantly what should
not be done?
◍ The term "strategy" has grown in usage in a variety of fields today. Which
of the following is the best use of the term for this course?.
Answer: The firm's efforts to gain and sustain competitive advantage.
◍ Physical Assets.
Answer: Physical asset markets (also called "tangible" or "real" asset
markets) are for products such as wheat, autos, real estate, computers, and
machinery.
◍ Industry structures are not stable over time. The U.S. banking industry has
