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Venue Financial Management Flashcards

7 cards from real CVE practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Venue Financial Management flashcards as text
  1. A venue's accounts receivable days outstanding increases from 25 to 45 days. This change most likely indicates:

    Answer: Slower collection of invoices

    A higher days-outstanding figure means the venue is taking longer to collect payments, which can strain cash flow.

  2. What is the purpose of a capital expenditure (CapEx) budget for a venue?

    Answer: To plan major asset purchases and long-term investments

    A CapEx budget plans for significant purchases like equipment, renovations, or technology that provide long-term value beyond a single accounting period.

  3. Which financial ratio measures a venue's ability to pay short-term obligations with its most liquid assets?

    Answer: Quick ratio

    The quick ratio (cash + receivables ÷ current liabilities) measures liquidity using only the most liquid assets, excluding inventory.

  4. A venue generates $1.2M in annual revenue and has $180,000 in net profit. What is the net profit margin?

    Answer: 15%

    Net profit margin = Net profit ÷ Revenue = $180,000 ÷ $1,200,000 = 15%.

  5. In venue contract negotiations, a 'minimum guarantee' clause primarily protects:

    Answer: The venue from event cancellations

    A minimum guarantee ensures the venue receives a baseline revenue payment regardless of actual event attendance or consumption.

  6. Which internal control best prevents duplicate payments to vendors in a venue's accounts payable process?

    Answer: Three-way matching of purchase order, receiving report, and invoice

    Three-way matching verifies that the purchase order, delivery receipt, and vendor invoice all agree before payment is authorized, preventing duplicates and errors.

  7. A venue manager reviews an unfavorable budget variance for utilities. The FIRST step in addressing this variance is to:

    Answer: Investigate the root cause of the overage

    Before taking corrective action, a manager must identify whether the variance stems from higher-than-expected usage, rate increases, or a billing error.