Learning Assignment 5.docx - Learning Assignment 5 1 What...

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Learning Assignment 5 1. What determines a company’s profitability? The company’s profitability is affected by the relationship of sales levels and expected sales- expense relationships. The higher the sales to the expenses the more profitable the firm will be. 2. Discuss how asset and financing requirements might differ among a retail business, a service company, and an information system-based venture. Financing and asset requirements would probably be higher for a retail business than for a service company or an information system-based venture because the retail location would need items like display equipment, décor related items, and furniture. All three types of business would require office types of furniture and equipment. 3. Why is it important to consider an entrepreneur’s personal finances when conducting the short- and long-term financial forecasts of a firm? The personal financial situation is important to consider in the financial plan. Poor consideration
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