A Major Advantage of Productivity Ratios Is

question 92

Multiple Choice

A major advantage of productivity ratios is

• A) the ability to integrate sales growth and productivity assessments into one analysis.
• B) the ability to compare total productivity to targeted productivity.
• C) the inclusion of asset investment considerations in the ratio analysis.
• D) that they can be compared directly across the entire sales organization and with other sales organizations.
• E) that they eliminate the need for allocation judgments and are therefore viewed as more objective.

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Definitions:

Internal Users

Individuals within an organization who use financial information to make decisions, including management and employees.

Company Officers

Individuals with executive roles responsible for managing the operations and affairs within a corporation, such as CEOs and CFOs.

Owner's Equity

Owner's Equity represents the residual interest in the assets of a business after deducting liabilities, essentially the owner's claim on the company's assets.

Net Income

The financial gain a company achieves once all expenses, taxes, and other costs are subtracted from the total sales.