The Savvy Entrepreneurial Firm Feature in Chapter 8 Focuses on a Scenario

question 17

Multiple Choice

The Savvy Entrepreneurial Firm feature in Chapter 8 focuses on a scenario involving the selection of a new CEO for New Venture Fitness Drinks. The lesson learned from the feature was ________.

• A) compare a firm's financial ratios against its primary competitors and industry norms to fairly assess how well a firm is performing financially
• B) income statements are more effective in assessing how well a firm is performing financially than are balance sheets and statements of cash flow
• C) the most powerful instrument for understanding how well a firm is performing financially is the statement of cash flows
• D) ratio analysis is ineffective
• E) look at multiple years of an income statement rather than a single year to fairly assess how well a firm is performing financially