CBM 102:

Strategic Management

I. Modified True or False.

On the blank before each number, write TRUE if the statement is correct; if it is FALSE, change the underlined word or group of words to make the statement correct.

_____ 1. Corporate governance has both strategic and environmental implication.

_____ 2. Corporate governance iscommonly expressed inwritten policies that

specifically restrict or direct how people can act to accomplish established goals.

_____ 3. Procedures are the specific methods employed to express policies in action in

day-to-day operations of the organization.

_____ 4. Corporate governance is based on the idea that giving employees skills,

resources, authority, opportunity, motivation, as well holding them responsible and accountable for outcomes of their actions, will contribute to their competence and satisfaction.

_____ 5. The formulation aspect covers the set of activities needed to keep an update

of the level of implementation and execution of the strategy.

_____ 6. Strategic audit acts as a diagnostic tool to pinpoint corporate wide problem

areas and to highlight organizational strengths and weaknesses.

_____ 7. Ratio analysis determines trends and exposes strengths or weaknesses of a firm.

_____ 8. The income statement shows the firm's assets, liabilities and net worth on stated date

_____ 9. Leverage ratios refer to how well the business manages its routine activities

particularly in terms of inventory management, asset turnover and accounts receivables.

_____ 10. Activity ratios show monetary returns out of the infusion and use of capital or

investments.

II. Modified Multiple Choice.

For Items 1-8:

Identify the categories in which each of the following ratios are used.

a. Liquidity Ratio c. Activity Ratio

b. Profitability Ratio d. Leverage Ratio

_____ 1. Current Ratio

_____ 2. net profit margin

_____ 3. Asset turnover

_____ 4. Acid Test Ratio

_____ 5. return on owners equity

_____ 6. Debt to asset ratio

_____ 7. Earnings per share

_____ 8. Inventory turnover

_____ 9. Times interest earned

_____ 10. Debt to equity ratio

For Items 11-15:

Identify the area of balance scorecard described below:

a. Financial perspective c. customer perspective

b. Internal perspective d. innovation and growth

_____ 11. measure corporate image

_____ 12. This aspect address the matter of how should the firm appear in the view of

shareholders and investors

_____ 13. It concerns what business process a firm must excel in.

_____ 14. Addresses the challenge of the need to continue to improve and create value.

_____ 15. This aspect deals with the concern on how the firm should be viewed by its

customers

For Items 16-20:

Identify the strategic management process that is characterized by the following:

a. Strategic formulation c. all of the above

b. Strategic implementation d. none of the above

_____ 16. requires good intuitive & analytical skills

_____ 17. focuses on efficiency

_____ 18. primarily an operational process

_____ 19. focuses on effectiveness

_____ 20. requires special motivational & leadership skills