A023-ENTREP 1A-Fundamentals of Entrepreneurship

Submitted by: Dianna Lynn L. Molina (BSA-1-3)

Submitted to: Sir Arly N. Visperas

ASSIGNMENT NO. 4
Discussion Questions No. 4
1. Would you prefer to start and organize an entirely new business than
buy an existing firm? Discuss.
> I would rather buy an existing firm than start and organize an entirely new
one. A well-established business will have a financial history, which provides me
an idea of what to expect. I plan to acquire existing customers, contacts, goodwill,
suppliers, staff, plant, equipment, and stock.

2. "Buying an existing business increases the certainty of successful

operation by the new owner". Do you agree?
> Yes, I agree with the statement.

3. Would you prefer an official audit report instead of an owner-produced

report when evaluating a firm for purchase?
> I prefer an official audit report instead of an owner-produced report when
evaluating a firm for purchase.

4. Of what use are bank deposit records in firm evaluation?

> The bank deposit records are an internal document that confirms the accuracy
of the depositor's and financial institution's records. It also helps in the
identification of accounting and banking problems by explaining the differences
between the cash balances on the accounting records and the bank balance
position on the bank statement.

5. What ratios would you look for in the books of the firm you want to buy?
> The Current Ratio and the Net Profit Margin.