General Question

pallen123's avatar

If you were trying to assess an individual's grasp of basic finance, which two questions would you ask them?

Asked by pallen123 (1510 points ) May 28th, 2010

I’m trying to develop a quick survey for a group of entrepreneurs to gauge their knowledge in different areas. What questions would you ask someone to determine whether they understand key finance concepts important for starting a new business?

For example: What does Gross Margin mean?

or… What is the difference between Revenue and Earnings?

I’m looking for maybe ten questions or so…

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18 Answers

Cruiser's avatar

What is your cost of goods sold?

What is your minimum gross sales you need to run your company at a profit?

CMaz's avatar

What @Cruiser said. What is your start-up cost to profit margin?

stratman37's avatar

1) How much money do you have?
2) Can I have it?

dpworkin's avatar

A Credit Default Swap operates as a form of what?

Primobabe's avatar

Is a debit a good or bad thing?

This question guages whether someone has even a fundamental, layman’s knowledge of accounting principles. The answer is: neither. A debit is a positive, or left-side, entry; a credit is a negative, or right-side, entry. The two terms have no subjective meanings whatsoever. Most people are shocked to learn that revenue is a (-) entry and that a revenue account has a negative balance; it’s counter-intuitive.

mariatk's avatar

The 80–20 rule?
What is a write off?

Jewel's avatar

1. How much do you make?
2. How much do you spend?

Oh, wait…I didn’t read the entire question! Outside of asking for a detailed business plan, I don’t know.

perspicacious's avatar

How is the dollar valued?
How do foreign markets affect the US market?

Primobabe's avatar

@perspicacious I think that those are questions for an economist, not for a typical business owner.

Primobabe's avatar

What is your form of business entity, and how/why did you make that choice?

perspicacious's avatar

@Primobabe They are pretty basic if working on a degree in finance—guess that’s how I was thinking about the question.

YARNLADY's avatar

What do you collect taxes on and how do you transfer those taxes to the correct agency?

SmashTheState's avatar

(1) What is the difference between the gold standard and the fractional reserve system?

(2) How do each of the three main branches of capitalism (characterized by the US, Germany, and Japan respectively) relate to Marx’s labour theory of value?

Primobabe's avatar

@SmashTheState With all due respect, and not intending to be confrontational, those aren’t questions for an entepreneur. They’re for an economist, political scientist, or philospher. The owner of a start-up business doesn’t sit around and ponder The Communist Manifesto. That person also doesn’t fret about the nation’s currency; he/she just wants to bring in some money!

Dr_Lawrence's avatar

How do you know their is a demand for the types of goods or services you intend to provide?

How do you know you can you compete successfully with other businesses that provide the same or similar goods or services?

Primobabe's avatar

How do you market and promote your business?

pallen123's avatar

Thank you very much, these are excellent! I’m especially looking for closed questions with multiple choice responses so we can easily score the survey.

MissA's avatar

What is your step-up profit formula including time frame?

How much capital do we need to set aside, for the worst case local/national/global scenario which might affect our product/service?

I don’t mean this to sound as if I’m bursting your bubble, but I’ve owned businesses wherein they had to survive some acutely tough times. None of those times were tied to mismanagement…things happen…CRAzy things happen…beyond our control.

Perhaps most important to many:
When do we get to cash our checks?

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