Nate Wants to Start a Business Involving the Manufacture of Fishing

question 51

Multiple Choice

Nate wants to start a business involving the manufacture of fishing boats.However, he is worried that if one of the boats that he sells ends up sinking, he might become bankrupted if the buyer sues him.Which business structure should Nate adopt?

• A)Partnership
• B)Company
• C)Trust
• D)Sole trader

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Definitions:

Profit Margin

A financial ratio that indicates the percentage of revenue that exceeds the cost of goods sold, showing the profitability of a company.

Asset Turnover

A financial ratio that measures the efficiency of a company's use of its assets in generating sales revenue—the higher the ratio, the more efficiently the company is utilizing its assets.

Financial Statements

These are written records that convey the business activities and the financial performance of a company, typically including the balance sheet, income statement, and cash flow statement.

Benjamin Graham

A renowned economist and professional investor, regarded as the father of value investing.