In Which of the Following Instances Is Retrenching to a Narrower

question 60

Multiple Choice

In which of the following instances is retrenching to a narrower diversification base NOT likely to be an attractive or advisable strategy for a diversified company?

• A) When a diversified company has struggled to make certain businesses attractively profitable
• B) When a diversified company has too many cash cows
• C) When one or more businesses are cash hogs with questionable long-term potential
• D) When businesses in once-attractive industries have badly deteriorated
• E) When a diversified company has businesses that have little or no strategic or resource fits with the "core" businesses that management wishes to concentrate on

---

Definitions:

Current Position Analysis

This is an evaluation of an organization's current financial status and performance, particularly focusing on its liquidity, solvency, and overall financial health.

Current Liabilities

Obligations or debts that are due to be paid within one year or within the normal business cycle.

Working Capital

the difference between a company's current assets and current liabilities, indicating the liquidity and operational efficiency.

Industry Figures

Statistical data or benchmarks pertaining to a specific industry, used for comparison or analysis.