When Evaluating a Balance Sheet, the Two Primary Questions Are

question 23

Multiple Choice

When evaluating a balance sheet, the two primary questions are ________.

• A) whether a firm has sufficient short-term assets to cover its short-term debts and whether it is profitable
• B) whether a firm is profitable and whether a firm is financially sound
• C) whether a firm's cost of sales is going up and whether it is generating excess cash that could be used to pay down debt or pay dividends
• D) whether a firm has sufficient short-term assets to cover its short-term debts and whether it is financially sound
• E) whether a firm is profitable and whether it is generating excess cash that could be used to pay down debt or pay dividends

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Definitions:

Durable Goods

Products that are not consumed or destroyed in use and thus have a long life-span, such as cars and appliances.

Marketing Actions

Specific steps or strategies undertaken by companies to promote and sell products or services to target audiences.

New Product Development

A process used by companies to conceptualize, design, develop, and finally launch a new product in the market.

Nondurable Good

A product that is consumed or has a short life span, typically less than three years, such as food, fuel, or paper products.