Directions: Please answer the following questions using complete sentences. A minimum of one paragraph is required for each response. Each paragraph must be five to seven sentences in length.
1. What are the benefits of the budgeting process?
2. Describe how an operating budget is constructed.
3. Describe how a cash-flow budget is constructed.
4. Describe how a capital budget is constructed.
5. What is a ratio analysis? How is horizontal analysis different from vertical analysis?
6. What is a business plan?
7. Describe each of the five planning pitfalls entrepreneurs often encounter.
8. Identify the benefits of a business plan (a) for an entrepreneur and (b) for financial sources.
9. Briefly describe each of the major segments to be covered in a business plan.
10. Outline some of the critical points to capture in an elevator pitch.