Why Is It Important to Assess Operating Profit

question 8

Multiple Choice

Why is it important to assess operating profit?

• A)Operating profit represents the firm's profits after consideration of all revenues, expenses and comprehensive income.
• B)The figure for operating profit provides a basis for assessing the success of the firm apart from its financing and investing activities and separate from tax considerations.
• C)Operating profit represents the firm's profits after consideration of all revenues and expenses.
• D)Operating profit represents the firm's profits after consideration of all revenues and expenses, except for taxes.

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Definitions:

Consensus

General agreement among all members of a group or the process of reaching such an agreement.

Disruptive Act

An innovation or event causing a radical change in an existing industry or market by displacing old methods, products, or companies.

Social Loafing

The occurrence in which people put in less effort towards achieving a goal while working in a group compared to working by themselves.

Work Ethics

Principles that govern a person's conduct at work, typically emphasizing hard work, integrity, and responsibility.