In Analyzing the Borrowing Position of a Utility, Which of the Following

question 8

Multiple Choice

In analyzing the borrowing position of a utility, which of the following is primary?

• A) liquidity
• B) ability to earn a profit
• C) return to shareholders
• D) long-term debt capacity
• E) utilization of current assets

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Definitions:

Gross Profit

The difference between the selling price and the unit cost of an item of merchandise. (Also called markup.)

Markdown

The reduction of a product's selling price, often to clear inventory or promote sales.

Mark-up

An enhancement to the price at which goods are bought to include expenses and profit.

Selling Price

The amount of money a buyer pays to purchase a product or service from a seller.