Companies That Carry a High Level of Fixed Costs Relative

question 35

True/False

Companies that carry a high level of fixed costs relative to variable costs are considered to have greater risk than companies with a high level of variable costs relative to fixed costs.

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Definitions:

High-growth Firms

Companies characterized by their fast-paced growth in revenues, market share, or employees, typically outperforming their industry averages.

High-tech

Referring to industries or products involving the latest technology, often in the fields of electronics, computers, and biotechnology.

Health Care

The maintenance or improvement of health via the prevention, diagnosis, treatment, recovery, or cure of disease, illness, injury, and other physical or mental impairments in people.

Labor-intensive Business

A business that requires a high level of manual labor input compared to capital investment, typically characterized by a significant proportion of operational costs being attributed to human labor.