To Get a Proper Picture of the Position of the Organization

question 61

Multiple Choice

To get a proper picture of the position of the organization, common-size statements and ratios should be compared to

• A) the organization's future historical performance.
• B) the leading competitor in the industry.
• C) the financial performance of the overall U.S. gross domestic production (GDP).
• D) the direct competitor least like the organization.
• E) industry-wide average trends.

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Definitions:

Positive Statement

An objective statement that can be tested, based on factual information and data, without any value judgments.

Industrial Society

A society characterized by a reliance on mechanized labor to create material goods, often associated with a significant shift from agricultural to industrial economies.

Normative Question

A question that addresses what ought to be, focusing on subjective judgments or prescriptions about economic policies.

Normative Statement

A statement expressing a value judgment about what ought to be, rather than stating objective facts or describing what currently exists.