A Company Pursuing a Strategy of Vertical Integration May Expand

question 47

Multiple Choice

A company pursuing a strategy of vertical integration may expand its operations

• A) backward into an industry that produces inputs for the company's products.
• B) forward into an industry that uses, distributes, or sells the company's products.
• C) laterally into an industry that competes with the company's products.
• D) A and B.
• E) A and C.

---

Definitions:

Consistency

An accounting principle that requires companies to apply the same accounting methods and procedures from period to period.

Comparative Financial Statements

Financial reports that provide information for multiple periods, typically side by side, allowing for an easier analysis of financial performance over time.

Single-Year Statements

Financial statements or reports that cover a one-year period or fiscal year, providing a snapshot of a company's financial activity and position.

Price/Earnings

Also known as the P/E ratio, this measures a company's current share price relative to its per-share earnings.