Management Has the Responsibility, and the Ability, to Take Action

question 28

Multiple Choice

Management has the responsibility, and the ability, to take action to reduce risks or to lessen the impact al nearly all risks an organization faces.The steps taken by management to lessen the risk or reduce the impact of the risk, are referred to as:

• A)Programs
• B)Risk assessment
• C)Information evaluation
• D)Controls

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Definitions:

Working Capital

The difference between a company's current assets and current liabilities, indicating the liquidity available to fund daily operations and short-term financial obligations.

Current Liabilities

Financial obligations a company is expected to settle within one year or within its operating cycle, whichever is longer.

Current Ratio

A financial metric that measures a company's ability to pay off its short-term liabilities with short-term assets.

Total Asset Turnover

A financial ratio that measures a company's efficiency in using its assets to generate sales revenue, calculated by dividing sales revenue by total assets.