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BU481 Study Guide - Quiz Guide: Balanced Scorecard, Pest Analysis, Vertical Integration

Course Code
Karin Schnarr
Study Guide

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Quiz 1 Review
Strategic Management: A ogoig proess that ealuates ad eoles a fir’s diretio y:
Assessing competitive environment and setting goals
Determining and choosing between strategic choices
Regularly re-assessing implementation
Evaluating changing/newly emerging circumstances
Role of the General Manager: Create value for the company play a key role in setting the LT
diretio ad are aoutale for opay’s perforae
Performance Matrix:
Operating Performance: Quantitative measures of financial and market performance
Organizational Health: Qualitative and quantitative measures of operating health
Dynamic Tool: Asks here your usiess as 3 years ago, today, ad diretio it’s goig
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Balanced Scorecard:
How do customers see us? Customer
What must we excel at? Internal
Can we continue to improve and create value? Innovation and Learning
How do we look at shareholders? Financial
Create goals for each area; data related needs to be timely; different focus for different
idustries; aagers’ opesatios should e diretly liked to ahieeet of
measures; have ongoing support and involvement of senior mgmt.
Financial Ratios: Proide idiatio of ho ell opay’s urret strategy is orkig year
over year or against competitors
Profitability ratios
o Gross profit argi, Net profit argi, Retur o assets, Retur o stokholders’
equity, Return on invested capital, Return on sales, Earnings per share (growth)
Liquidity ratios
o Current ratio (> 1.0), Quick ratio (acid test ratio), Working capital (bigger
amounts = better = company has more internal funds)
Financial leverage ratios
o Debt-to-assets ratio (low = better), Debt-to-equity ratio (< 1.0), LT Debt-to-equity
ratio lo = greater apaity to orro addl’ fuds, Ties-interest earned (> 3.0
= greater creditworthiness)
Asset turnover ratios
o Days of inventory (less = better), Inventory turnover (high = better), Average
collection period (shorter = better)
Other dividends, cash flow
o Dividend yield on common stock, Price/earnings ratio, Internal cash flow, % of
sales from new products (esp. for high innovative industries)
Strong sense of direction for the company
Internal Business
Innovation and
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