A Company That Is Reducing the Scope of Its Activities

question 58

Multiple Choice

A company that is reducing the scope of its activities by selling unprofitable business units or those no longer directly related to its overall aims is likely following a ________ strategy.

• A) growth
• B) retrenchment
• C) stability
• D) combination

---

Definitions:

Cash Flows

The entirety of capital movements entering and exiting a firm, significantly affecting its financial fluidity.

Controller

An executive role responsible for overseeing the accounting operations within a company, managing financial reporting, budgets, and internal controls.

Dissemination

The process of distributing or spreading information, knowledge, or data widely, especially to ensure accessibility to relevant stakeholders.

Operating Cycle

The duration between the acquisition of inventory and the collection of cash from receivables.