MGMT 441 Test 1 Questions and Answers Already Passed Latest Update 2025-2026
Ratios that focus on the level of a firm's financial flexibility, including its ability to obtain more
debt, are known as - Answers Leverage Ratio
Which type of ratios focus on the ability of a firm to meet its short-term financial obligations? -
Answers Liquidity Ratio
Firms that generate less economic value than their rivals experience a competitive - Answers
Disadvantage
________ are specific measurable targets a firm can use to evaluate the extent to which it is
realizing its mission. - Answers Objectives
A firm's ________ is its long-term purpose that defines both what it aspires to be in the long run
and what it wants to avoid in the meantime. - Answers Mission
A competitive advantage that lasts a very short period of time is known as a ________
competitive advantage. - Answers Temporary
Theories of how to gain competitive advantage in an industry that emerge over time or that have
been radically reshaped once they are initially implemented are known as - Answers Emergent
Strategies
From 1926 to 1995, visionary firms earned ________ returns compared to firms that were not
visionary firms. - Answers Substantially higher
The two types of measures of competitive advantage include - Answers accounting measures
and economic measures.
The realized strategy of most firms tends to be - Answers a combination of both intended and
emergent strategies
Using ratio analysis, a firm earns ________ when its performance is greater than the industry
average. - Answers above average accounting performance
________ occurs when a firm adopts organizational policies and practices that are consistent
with its strategy. - Answers Strategy implementation
Which of the following is a reason why it is important for students to study strategy and the
strategic management process? - Answers All of the above
Thermacorp's 17.3% ROE is an example of a(n) ________ ratio. - Answers Profitability
A firm that is able to attract additional capital because debt holders and equity holders will
scramble to make additional funds available for it is likely earning - Answers above normal
economic performance.
, The difference between the perceived benefits gained by a customer who purchases a firm's
products or services and the full economic cost of these products or services is the (Note:
Porter was deleted from this edition) - Answers Economic value
Actions firms take to gain competitive advantages by operating in multiple markets or
industries simultaneously are known as - Answers Corporate level strategies
Accounts receivable turnover is an example of which type of ratio? - Answers Activity
By conducting a(n) ________, a firm identifies the critical threats and opportunities in its
competitive environment. - Answers External analysis
________ helps a firm understand which of its resources and capabilities are likely to be sources
of competitive advantage. - Answers Internal analysis
Thermacorp's weighted average cost of capital is 13.5. If the average WACC in the heating and
cooling industry is 19, Thermacorp can be said to be earning - Answers below normal economic
performance.
High quality objectives are those that are - Answers tightly connected to elements of a firm's
mission and are relatively easy to measure and track over time.
From 1926 to 1995, visionary firms earned ________ returns compared to firms that were not
visionary firms - Answers substantially higher
If the average ROE in the heating and cooling industry is 10.1%, and Thermacorp's ROE is 17.3%,
Thermacorp is said to have - Answers above average accounting performance
If TechnoGeek and VarsityBlue compete in the same market for the same customer and
TechnoGeek generates $900 of economic value each time it sells a product or service while
VarsityBlue generates $400 of economic value each time it sells a product or service,
TechnoGeek has a(n) ________ of $500. - Answers Competitive advantage
The mission statements of visionary firms - Answers suggest that profit maximizing, while an
important corporate objective, is not their primary reason for existence.
Which ratio signals a greater risk of bankruptcy as it increases? - Answers debt to assets
Frequent price cutting by firms in an industry, frequent introduction of new products by firms in
an industry and intense advertising campaigns are indications of - Answers high levels of direct
competition
The products or services provided by a firm's substitutes meet ________ customer needs in
________ ways as the product provided by the firm itself. - Answers approximately the same;
different
All other things being equal, which of the following would lead to lower barriers to entry in an
Ratios that focus on the level of a firm's financial flexibility, including its ability to obtain more
debt, are known as - Answers Leverage Ratio
Which type of ratios focus on the ability of a firm to meet its short-term financial obligations? -
Answers Liquidity Ratio
Firms that generate less economic value than their rivals experience a competitive - Answers
Disadvantage
________ are specific measurable targets a firm can use to evaluate the extent to which it is
realizing its mission. - Answers Objectives
A firm's ________ is its long-term purpose that defines both what it aspires to be in the long run
and what it wants to avoid in the meantime. - Answers Mission
A competitive advantage that lasts a very short period of time is known as a ________
competitive advantage. - Answers Temporary
Theories of how to gain competitive advantage in an industry that emerge over time or that have
been radically reshaped once they are initially implemented are known as - Answers Emergent
Strategies
From 1926 to 1995, visionary firms earned ________ returns compared to firms that were not
visionary firms. - Answers Substantially higher
The two types of measures of competitive advantage include - Answers accounting measures
and economic measures.
The realized strategy of most firms tends to be - Answers a combination of both intended and
emergent strategies
Using ratio analysis, a firm earns ________ when its performance is greater than the industry
average. - Answers above average accounting performance
________ occurs when a firm adopts organizational policies and practices that are consistent
with its strategy. - Answers Strategy implementation
Which of the following is a reason why it is important for students to study strategy and the
strategic management process? - Answers All of the above
Thermacorp's 17.3% ROE is an example of a(n) ________ ratio. - Answers Profitability
A firm that is able to attract additional capital because debt holders and equity holders will
scramble to make additional funds available for it is likely earning - Answers above normal
economic performance.
, The difference between the perceived benefits gained by a customer who purchases a firm's
products or services and the full economic cost of these products or services is the (Note:
Porter was deleted from this edition) - Answers Economic value
Actions firms take to gain competitive advantages by operating in multiple markets or
industries simultaneously are known as - Answers Corporate level strategies
Accounts receivable turnover is an example of which type of ratio? - Answers Activity
By conducting a(n) ________, a firm identifies the critical threats and opportunities in its
competitive environment. - Answers External analysis
________ helps a firm understand which of its resources and capabilities are likely to be sources
of competitive advantage. - Answers Internal analysis
Thermacorp's weighted average cost of capital is 13.5. If the average WACC in the heating and
cooling industry is 19, Thermacorp can be said to be earning - Answers below normal economic
performance.
High quality objectives are those that are - Answers tightly connected to elements of a firm's
mission and are relatively easy to measure and track over time.
From 1926 to 1995, visionary firms earned ________ returns compared to firms that were not
visionary firms - Answers substantially higher
If the average ROE in the heating and cooling industry is 10.1%, and Thermacorp's ROE is 17.3%,
Thermacorp is said to have - Answers above average accounting performance
If TechnoGeek and VarsityBlue compete in the same market for the same customer and
TechnoGeek generates $900 of economic value each time it sells a product or service while
VarsityBlue generates $400 of economic value each time it sells a product or service,
TechnoGeek has a(n) ________ of $500. - Answers Competitive advantage
The mission statements of visionary firms - Answers suggest that profit maximizing, while an
important corporate objective, is not their primary reason for existence.
Which ratio signals a greater risk of bankruptcy as it increases? - Answers debt to assets
Frequent price cutting by firms in an industry, frequent introduction of new products by firms in
an industry and intense advertising campaigns are indications of - Answers high levels of direct
competition
The products or services provided by a firm's substitutes meet ________ customer needs in
________ ways as the product provided by the firm itself. - Answers approximately the same;
different
All other things being equal, which of the following would lead to lower barriers to entry in an
