Which of the Following IS NOT a Reason Firms Outsource

question 40

Multiple Choice

Which of the following IS NOT a reason firms outsource the performance of an activity to an external supplier?

• A) This may create more value for customers.
• B) They can concentrate their own resources on their own core competencies.
• C) They will have the flexibility to more rapidly alter how activities are being used to implement its strategies.
• D) They will necessarily develop relationships with more firms thereby increasing their human capital.

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Definitions:

Net Working Capital

The discrepancy between a firm's immediate assets and its short-term obligations.

Liquid Ratio

A financial metric comparing a company's liquid assets (cash and marketable securities) to its current liabilities, often used to assess liquidity.

Common Size Statement

A financial statement in which each line item is expressed as a percentage of a significant total, facilitating comparison across companies or periods.

Liabilities Plus Equity

Liabilities plus equity represents the total value of a company's financial obligations plus its owners' investments, crucial for understanding its financial health.