Break‑even Analysis May Be Used to Show​

question 25

Multiple Choice

Break‑even analysis may be used to show​

• A) ​the relationship between debt financing and earnings
• B) ​the level of sales necessary to avoid losses
• C) ​the level of output required to maximize profits
• D) the relationship between sales and equity​

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Definitions:

Inventory Turnover

A metric that displays the frequency at which a company's stock is sold and replenished during a certain timeframe.

COGS

The Cost Of Goods Sold; it represents the direct costs attributable to the production of the goods sold by a company.

Net Cash

Describes the amount of cash available after accounting for all cash inflows and outflows.

Statement Of Cash Flows

A financial report that shows how changes in balance sheet accounts and income affect cash and cash equivalents, breaking the analysis down to operating, investing, and financing activities.