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Operational Turnaround Flashcards

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

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  1. What is a '100-day plan' in the context of a turnaround engagement?

    Answer: A structured short-term action plan to achieve critical stabilization milestones

    A 100-day plan outlines the specific actions, owners, and milestones a turnaround team commits to achieving in the first three months to stabilize and begin improving the business.

  2. Why is supplier relationship management critical during an operational turnaround?

    Answer: Maintaining supplier trust preserves the supply chain needed to continue operations

    If suppliers lose confidence in a distressed company and tighten credit terms or stop shipments, it can accelerate the crisis by disrupting production and revenue.

  3. What is a 'contribution margin' analysis used for in operational turnaround?

    Answer: Identifying which products or customers generate positive cash flow after variable costs

    Contribution margin analysis reveals which products, services, or customer segments cover their variable costs and contribute to fixed cost recovery, guiding resource allocation.

  4. In a turnaround, what does 'customer concentration risk' refer to?

    Answer: Excessive revenue dependence on a small number of customers

    Customer concentration risk means a distressed company relies on few customers for most of its revenue, making it highly vulnerable if those customers reduce orders or leave.

  5. Which of the following best describes 'zero-based budgeting' in a turnaround context?

    Answer: Building the budget from zero, justifying every expense from scratch

    Zero-based budgeting requires managers to justify every line of expenditure from scratch rather than assuming prior-year spending is appropriate, exposing unnecessary costs.

  6. What is the role of a Chief Restructuring Officer (CRO) in an operational turnaround?

    Answer: To provide independent leadership and execute the turnaround plan with authority

    A CRO is an experienced turnaround professional brought in to lead the distressed company with the authority and credibility needed to execute both operational and financial changes.

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