Avoiding Overextension of Finance and other Resources
Avoiding Overextension Quiz
Test your knowledge on avoiding overextension of finance and resources in business. This quiz covers key concepts that every entrepreneur should be aware of to sustain growth and stability.
- Understand the stages where businesses typically overextend
- Learn about the impact of excessive borrowing and hiring
- Get tips on effective resource management
What stage do businesses usually over extend in?
Establishment
Growth
Maturity
Post-Maturity
A business can overextend by:
Using hire purchase and/or leasing commitments made on cars, equipment, office furniture, plant and machinery and the premises
Purchasing excess stock
Employing too many staff for the business’s current needs
All of the above
What is gearing?
Revenue
Expenses
Debt
Profit
What can purchasing property lead to?
Overextension of resources
Overborrowing
Stockpiling
Excess expenditure
Overextension of staff is due to over-optimism of what?
Appropriate job allocations
Hiring
Sales goals
Overextension of stock can be reduced by
Avoiding stockpiling and keeping only to limited supplies and order regularly
Ordering in bulk only when on sale for cheapest price
Leasing
How can you avoid overextending finance
Have a business plan
Avoid an over dependence on debt financing
Have long-term financial planning
Starting small and allowing the market to determine the right times for expansion and growth
All of the above
About how many stores did target open in the first 10 months of extending to Canada?
140
100
120
80
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