Short-Term Planning Should Include Creating and Maintaining an Emergency Fund

question 78

True/False

Short-term planning should include creating and maintaining an emergency fund with at least 6 months' worth of income.

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Definitions:

Return on Total Assets

A financial metric indicating how profitable a company is relative to its total assets, measuring the efficiency in using assets to generate earnings.

Net Profit Margin Percentage

A financial ratio that shows what percentage of sales has turned into profits, indicating overall profitability.

Gross Margin Percentage

A financial metric that represents the difference between sales and cost of goods sold, expressed as a percentage of sales.

Year 2

The second year in a sequence, often used in financial and operational planning or analysis.