Since Performance Is Not Always Consistent, an Industry's Track Record

question 5

True/False

Since performance is not always consistent, an industry's track record should not be of much concern to investors.

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Definitions:

Shortage Costs

Expenses incurred when demand exceeds supply, including lost sales and the cost of expedited orders or production to meet demand.

Restrictive Financing Policy

A financial strategy that involves maintaining lower levels of current assets or using more short-term financing to fund those assets, aiming to reduce costs but increase risk.

Cumulative Cash Surplus

The total amount of cash that a business has generated over a certain period, after accounting for all cash inflows and outflows.