Percentage Analyses, Ratios, Turnovers, and Other Measures of Financial Position

question 130

Multiple Choice

Percentage analyses, ratios, turnovers, and other measures of financial position and operating results are

• A) a substitute for sound judgment
• B) useful analytical measures
• C) enough information for analysis; industry information is not needed
• D) unnecessary for analysis if industry information is available

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Definitions:

Economics

A branch of social science that examines the methods by which people, governmental bodies, corporations, and states allocate finite resources to meet their infinite needs.

Opportunity Cost

The cost of foregone alternatives when a decision is made, essentially what is given up to undertake a certain action.

Alternative Use

speaks to the different ways an asset or resource can be utilized outside its current application, highlighting its opportunity cost.

Opportunity Cost

The cost of forgoing the next best alternative when making a decision or choosing to invest resources in one option over another.