Therese Is a Talented Designer Who Wants to Start Her

question 332

True/False

Therese is a talented designer who wants to start her own women's swimwear and beach towel line. But first, she is trying to decide which form of business ownership is right for her. As a young mom who hopes to send her children to college some day, she does not want to jeopardize her savings in any way. In order to overcome these risks, Therese should start her business as a sole proprietorship.

---

Definitions:

Common Size Analysis

A financial analysis technique that expresses each line item on a financial statement as a percentage of a base figure to allow for comparison.

Financial Statement

A written record detailing the financial activities and condition of a business, including balance sheet, income statement, and cash flow statement.

Base Amount

A reference value or level in financial calculations, often serving as a benchmark for comparing financial performance or changes.

Horizontal Analysis

A technique for evaluating a series of financial statement data over a period of time, to determine the increase (decrease) that has taken place, expressed as either an amount or a percentage.