Use the Following to Answer Question(s)

question 104

Multiple Choice

Use the following to answer question(s) :
Exhibit: Sugar and Freight Trains

-(Exhibit: Sugar and Freight Trains) The downward slope of the production possibilities curve implies:

• A) resources in the economy are scarce.
• B) the economy must be controlled by the government.
• C) sugar is more important than freight trains.
• D) the economy produces more sugar than freight trains.

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Definitions:

Vertical Analysis

A financial analysis method in which each entry for each of the three major categories of accounts (assets, liabilities, and equities) in a balance sheet is represented as a proportion of the total account.

Profitability Analysis

The process of reviewing and evaluating a company's ability to generate income (profit) relative to revenue, balance sheet assets, operating costs, and equity over time.

Horizontal Analysis

A method of financial analysis in which financial statements figures for a period are compared to those of the previous period to determine the changes in dollar amounts and percentages.

Liquidity Ratios

Financial metrics used to measure a company's ability to pay off its short-term liabilities with its short-term assets.