A Consultant Ranks the Five Most Needed Areas of Improvement

question 54

Multiple Choice

A consultant ranks the five most needed areas of improvement for a local business.What scale of measurement are the rankings?

• A) nominal
• B) ordinal
• C) interval
• D) ratio

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Definitions:

Receivables Turnover Ratio

A financial metric indicating how efficiently a company collects its receivables, calculated by dividing net credit sales by the average accounts receivable.

Credit-Granting Policies

Guidelines established by lenders to determine the criteria and conditions under which credit is extended to borrowers.

Vertical Analysis

An accounting method where each entry in a financial statement is listed as a percentage of another item, typically used for comparing companies of different sizes or assessing trends within a single company over time.

Cost of Goods Sold

The direct expenses related to the manufacturing of products that a company sells.