What Does It Mean When a Small Business Owner Has

question 76

Short Answer

What does it mean when a small business owner has low liquidity?

Analyze performance measurements, including margin and turnover.

Understand the effect of changes in sales, expenses, and assets on financial performance indicators.

Understand the concept of margin in ROI analysis and its computation.

Identify the benefits and drawbacks of using residual income as a performance measure.

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Definitions:

Long Run

The long run is a period in economics in which all factors of production and costs are variable, allowing for full adjustment to change.

Unemployment

Unemployment refers to the situation when individuals who are able and willing to work are not able to find employment.

Price Level

The mean of present prices for all goods and services produced within the economy.

Phillips Curve

An economic theory that proposes an inverse relationship between the rate of unemployment and the rate of inflation in an economy.