Industry-Based Considerations Are Fundamentally Concerned with the Very First of the Porter

question 61

True/False

Industry-based considerations are fundamentally concerned with the very first of the Porter five forces, interfirm rivalry.

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Definitions:

Fixed Expenses

Costs that do not fluctuate with the level of production or sales volume, such as rent and salaries.

Annual Profit

The net income a company earns over a fiscal year, after subtracting all expenses, taxes, and costs from total revenue.

Contribution Margin Ratio

The percentage of each sales dollar remaining after deducting variable costs, used to cover fixed costs and profit.

Margin Of Safety

The difference between actual or expected sales and the break-even point, expressing the level of sales fall that can be tolerated before a loss occurs.