A Common Misconception Is That a Performance Evaluation System Should

question 28

True/False

A common misconception is that a performance evaluation system should not measure every possible activity.

---

Definitions:

Operating Cycle

The average time period between the acquisition of materials for production and the receipt of cash from sales of the finished goods, critical for managing cash flow.

Current Liabilities

Financial obligations that a company is expected to pay within one year.

Liquidity

The ability to pay current obligations.

Liabilities

Financial obligations or debts that a company owes to external parties.