Strategies to Restructure a Diversified Company's Business Lineup Involve

question 16

Multiple Choice

Strategies to restructure a diversified company's business lineup involve

• A)revamping the value chains of each of a diversified company's businesses.
• B)focusing on restoring the profitability of its money-losing businesses and thereby improving the company's overall profitability.
• C)revamping the strategies of its different businesses, especially those that are performing poorly.
• D)divesting low-performing businesses that do not fit and acquiring new ones where opportunities are more promising to put a new face on the company's business makeup.
• E)broadening the scope of diversification to include a larger number of smaller and more diverse businesses.

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Definitions:

Income Statement Approach

A method for preparing the bad debt expense by estimating the amount of accounts receivable that will not be collected and adjusting the allowance for doubtful accounts accordingly.

Bad Debts Expense

The cost associated with accounts receivable that a company does not expect to collect due to customer default.

Receivables

Receivables, often called accounts receivable, are the funds owed to a company by clients or customers for goods or services already delivered or used but not yet paid for.

Bad Debts

Financial losses attributed to customers who fail to pay what they owe for purchased goods or services, often considered as an expense in accounting.