What Financial Ratio Is Most Commonly Used to Evaluate Charitable

question 150

Multiple Choice

What financial ratio is most commonly used to evaluate charitable organizations?

• A) Current assets / current liabilities.
• B) Increase in net assets / total assets.
• C) Program expenses / total expenses.
• D) Total expenses / total revenues.

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Definitions:

Variable Manufacturing Cost

Costs that vary directly with the level of production output, including direct materials and variable labor costs.

Production Volume

The total number of units produced during a specific period, reflecting the level of manufacturing activity.

Fixed Manufacturing Cost

Costs that remain constant regardless of the level of production or sales activities, such as salaries, rent, and depreciation on manufacturing equipment.

Production Volume

The total quantity of products or goods produced by a company within a specific period.