Standard Operating Procedures (SOPs) Help Make Bureaucracies More Efficient by

question 39

Multiple Choice

Standard operating procedures (SOPs) help make bureaucracies more efficient by

• A) facilitating groupthink.
• B) providing methods to be followed in carrying out tasks once a decision is made.
• C) preventing rivalries among bureaucratic agencies.
• D) Both A and C above.
• E) All of the above are true.

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Definitions:

Working Capital

The difference between a company's current assets and its current liabilities, indicating the liquidity available to run its operations.

Current Ratio

A measure of a business's capacity to cover its short-term liabilities, found by the ratio of current assets to current liabilities.

Acid-Test Ratio

A strict metric used to assess if a business possesses sufficient current assets to meet its short-term obligations without the need to liquidate inventory.

Times Interest Earned

A financial metric indicating how many times a company can cover its interest obligations with its earnings before interest and taxes.