Performance-Based Budgeting Is a System of Resource Allocation That

question 13

Multiple Choice

Performance-Based Budgeting is a system of resource allocation that

• A) establishes long-range planning goals and contains a cost-benefit analysis of existing and proposed programs
• B) focuses on the degree to which organizational goals and objectives are met
• C) links the performance levels of programs with specific budget amounts
• D) organizes the budget document by operation and performance, and links these to performance levels

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Definitions:

Times Interest Earned

This is a financial ratio that measures a company's ability to meet its debt obligations by comparing its interest expenses to its earnings before interest and taxes.

Gross Margin Percentage

A financial metric that indicates the proportion of money left over from revenues after deducting the cost of goods sold, expressed as a percentage of total revenue.

Earnings Per Share

A measurement of a company's profitability, calculated by dividing net income by the number of outstanding shares of its common stock.

Price-Earnings Ratio

A valuation metric for stocks, calculated by dividing the current market price of a share by its earnings per share (EPS).