Which of the Following Statements Is Correct

question 38

Multiple Choice

Which of the following statements is correct?

• A) The sales forecast is the driver for corporate financial planning.
• B) The addition to retained earnings is the driver for corporate financial planning.
• C) The debt ratio is the driver for corporate financial planning.
• D) None of the above

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Definitions:

Earnings Before Interest

A company's earnings calculated before interest expenses have been deducted, often referred to as EBIT (Earnings Before Interest and Taxes).

Tax Authorities

Governmental agencies responsible for the collection of taxes, enforcement of tax laws, and the administration of tax policy.

Net Sales

Revenue from the sale of goods or services after the deduction of returns, allowances for damaged or missing goods, and discounts.

P/E Ratio

Stands for Price-to-Earnings Ratio, which measures a company's current share price relative to its per-share earnings, often used to gauge valuation.