Many Companies Use a SWOT Analysis (Strengths, Weaknesses, Opportunities, and Threats)

question 52

Multiple Choice

Many companies use a SWOT analysis (strengths, weaknesses, opportunities, and threats) to evaluate where they stand relative to the competition. Identify a true statement in this context.

• A) Opportunities affect a firm's performance but are typically out of its control.
• B) Weaknesses are external to an organization.
• C) Increased consumer demand and complacent competitors are potential internal strengths.
• D) Low employee satisfaction and bad safety record are potential external threats.

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Definitions:

Times Interest Earned Ratio

A financial metric that measures a company's ability to meet its interest obligations, calculated by dividing earnings before interest and taxes by interest expenses.

Acid-Test Ratio

A financial metric that assesses a company's ability to pay off its current liabilities with its most liquid assets, excluding inventory.

Days' Sales Uncollected

A financial metric that measures the average number of days it takes a company to collect payments after a sale has been made.

Average Accounts Receivable

The mean amount of money owed to a company by its customers over a specific period, indicating the efficiency of credit policies.