Which of the Following Is True of Value Creation by Businesses

question 25

Multiple Choice

Which of the following is true of value creation by businesses?

• A) Businesses create value for customers through realized profits and losses.
• B) Businesses create value for employees by wages earned and job satisfaction.
• C) Businesses create value for competitors through the benefits of long-term business relationships.
• D) Businesses create value for suppliers by the citizenship they display.
• E) Businesses create value for local communities by stimulating markets and innovations that didn't exist before.

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Definitions:

Profitability Ratio

Financial metrics that are used to assess a business's ability to generate income relative to its revenue, assets, or equity.

Solvency Ratio

Solvency Ratio indicates a company's ability to meet its long-term debts and obligations, measuring the size of its after-tax income relative to its liabilities.

Current Ratio

A financial ratio indicating how well a company can settle short-term debts using its current assets.

Acid-test Ratio

A financial metric that measures a company's ability to pay off its short-term liabilities with its quick assets including cash, marketable securities, and receivables.