Firms That Compete on Overall Cost Leadership Are Vulnerable If

question 148

True/False

Firms that compete on overall cost leadership are vulnerable if there is an increase in the cost of the inputs on which the advantage is based.

---

Definitions:

Liquidity Position

A measure of the ability of an entity to meet its short-term financial obligations using assets that can be quickly converted to cash.

Fixed Assets Turnover Ratio

Measures how effectively the firm uses its plant and equipment. It is the ratio of sales to net fixed assets.

Appraise

To appraise is to evaluate or estimate the nature, quality, ability, extent, or significance of something or someone, often used in the context of property or art valuation.

Proportion

A part of a whole expressed as a fraction or percentage, often used to compare quantities in terms of size or magnitude.