Annual-Plan Control Requires Making Sure the Company Isn't Overspending to Achieve

question 81

Multiple Choice

Annual-plan control requires making sure the company isn't overspending to achieve sales goals. The key ratio to watch is ________.

• A) stock turnover
• B) gross margin
• C) return on capital
• D) cash flow return on investment
• E) marketing expense-to-sales

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Definitions:

Research and Development Expense

Costs associated with the research and development of a company's products or services, recognized as an expense.

Interest Expense

The cost associated with an entity's borrowing of funds during a specific time interval.

Income Before Taxes

The total revenue of a business minus all expenses except for taxes, used to evaluate profitability before tax impact.

Operating Expenses

Expenses incurred during the normal course of business operations, including sales and marketing, research and development, and administrative expenses.