Title: Performance Evaluation in Organizations
Course: Question Banks

Q: Customers are the backbone of any business. What are some ways to insure a subsequent sale or referral?
- Keep prices low.
- Advertise more aggressively.
- Deliver a quality, defect free product in a timely fashion with good customer service.
A: Deliver a quality, defect free product in a timely fashion with good customer service.

Q: Effective systems of a non-financial nature help a company to:
- Sell more of a low priced product.
- Keep investors happy with high profits and low expenses.
- Run and manage a profitable business.
A: Run and manage a profitable business.

Q: The manufacturing operation contains non-financial components that include:
- Customer complaints being handled within three contacts.
- Unskilled labor force that work at a minimal rate of pay to keep expenses down.
- An efficient manufacturing cycle.
A: An efficient manufacturing cycle.

Q: A complete performance report will include:
- Financial statements.
- Customer surveys and employee turnover data.
- Financial statements, budget to actual reports, customer surveys, defect reporting and efficiency data.
A: Financial statements, budget to actual reports, customer surveys, defect reporting and efficiency data.

Q: A unfavorable activity variance in revenue on a performance report could be a sign that:
- The company is meeting its sales goals.
- The company has priced its product or service to low.
- The company had lower than anticipated sales or offered a discount to build business
A: The company had lower than anticipated sales or offered a discount to build business

Q: Performance reports have more meaning if they include:
- The static budget for comparison purposes.
- Just the budget and actuals
- A summary of explanations to help managers understand variances.
A: A summary of explanations to help managers understand variances.

Q: A horizontal analysis can help a manager
- Comparing the budget to actual financial statements.
- Comparing the income statement to the balance sheet.
- See how a decision affects financial statements from one period to the next by comparing them side by side.
A: See how a decision affects financial statements from one period to the next by comparing them side by side.

Q: Trend analysis can be performed on:
- A balance sheet and income statement for a given period placed side by side.
- One income statement compared to the flexible budget.
- Any piece of data in a horizontal fashion, so compare wages and salaries one period, to wages and salaries the next period. The more periods of data you have the better analysis you can get of trends in the data.
A: Any piece of data in a horizontal fashion, so compare wages and salaries one period, to wages and salaries the next period. The more periods of data you have the better analysis you can get of trends in the data.

Q: You have been watching widget sales for a several periods and see the following data: Sales for Widget went from $5,000 to $4,700 to $5,500 to $5,680. What might you conclude?
- Ask your sales department why there was a drop in period two.
- As a manager, you can reduce the marketing for this product since sales is rising anyway.
- Sales of the widget are trending higher with a small dip early. You may want to check in on the lower month, but overall, the trend is for sales to continue to rise.
A: Sales of the widget are trending higher with a small dip early. You may want to check in on the lower month, but overall, the trend is for sales to continue to rise.

Q: Vertical analysis differs from horizontal analysis by:
- Comparing how payroll compares to payroll over time, rather than comparing to one common point over time.
- Compares how assets relate to income in a percentage format, rather than how income relates to assets.
- Comparing how each account compares in percentages to a common point (ex: expenses compare to sales), rather than how the expense compares to expense(ex: payroll to payroll) across a time period.
A: Comparing how each account compares in percentages to a common point (ex: expenses compare to sales), rather than how the expense compares to expense(ex: payroll to payroll) across a time period.

Q: Vertical analysis of data would show:
- Payroll increasing from $20,000 to $25,000 from one period to the next.
- Revenue of $40,000 in one period and $45,000 the next, as a percentage increase.
- Payroll of 25% of sales in period one, and 22% of sales in period two.
A: Payroll of 25% of sales in period one, and 22% of sales in period two.

Q: Trend analysis and common size analysis each have their own attributes. By analyzing using both methods managers can:
- Compare the same information in each analysis to insure accuracy.
- Provide a complete set of financial statements to shareholders
- Get a complete picture of business performance.
A: Get a complete picture of business performance.

Q: If a company has enough assets to cover their current liabilities they have performed the:
- Quick ratio analysis
- Return on assets analysis
- Current ratio analysis
A: Current ratio analysis

Q: ABC Corp has $52,000 in working capital, $18,000 in current liabilities and a long term mortgage payable of $81,000. How much do they have in total current assets?
- $34,000
- ($11,000) or -$11,000
- $70,000
A: $70,000

Q: Farmer Jane asked you to calculate her current ratio: She provided the following information: Cash and accounts receivable= $16,000. Accounts payable and payroll taxes payable= $12,500. Long-term note payable = $18,000. Her current ratio is:
- .781
- .525
- 1.28
A: 1.28

Q: Financial goals may include:
- Decreasing machine downtime by 5%.
- Increasing the sales calls per day from 20-25 calls.
- Increasing sales by 5% or decreasing payroll costs by 10%
A: Increasing sales by 5% or decreasing payroll costs by 10%

Q: Organizations set both financial and non-financial goals in order to:
- Set the bar really high for employees with unattainable goals.
- Raise net income through whatever means possible.
- Create a system that promotes business growth and improves customer and employee satisfaction.
A: Create a system that promotes business growth and improves customer and employee satisfaction.

Q: Benchmarks such as budget comparisons, customer acquisition or sales goals and others should be evaluated:
- Monthly or quarterly.
- Comparing financial statements on a quarterly or yearly basis should suffice for most organizations.
- Weekly, monthly, quarterly, yearly or at whatever interval and frequency make sense for each individual company.
A: Weekly, monthly, quarterly, yearly or at whatever interval and frequency make sense for each individual company.

Q: The goal of a non-profit agency is:
- Spend all grants and donations they receive each year.
- Provide income to their shareholders.
- Not to create a profit, but to meet a social need or mission.
A: Not to create a profit, but to meet a social need or mission.

Q: Financial goals for a non-profit agency might include:
- Serving 20,000 meals from their soup kitchen each year.
- Providing a dividend to each shareholder of $5,000 at the end of the fiscal year.
- Obtaining $20,000 in donations to meet their budgeted goal.
A: Obtaining $20,000 in donations to meet their budgeted goal.

Q: Budget to actual comparisons from a financial perspective for a non-profit are prepared in order to:
- To insure enough net income to distribute to shareholders.
- Make sure they served enough clients.
- Determine if the donations, grants and other income met goals, and that they were sufficient to cover the expenses of the delivery of program services.
A: Determine if the donations, grants and other income met goals, and that they were sufficient to cover the expenses of the delivery of program services.