One Way a Small Firm Can Succeed Against Larger Competitors

question 251

Multiple Choice

One way a small firm can succeed against larger competitors is to

• A) determine their break-even point price.
• B) add value to their product offering.
• C) eliminate the fringe benefits offered to frequent customers.
• D) use break-even segmentation.

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Definitions:

Net Profit Margin

A profitability ratio calculated as net income divided by revenue, expressed as a percentage, indicating how much profit a company generates from its total sales.

Quality of Income

A measure of how easily accounting income can be converted to cash, indicating the reliability of earnings.

Gross Profit Percentage

A financial metric that represents the proportion of money left over from revenues after accounting for the cost of goods sold, expressed as a percentage.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company.