Why Do the Products of Service Providers Tend to Be

question 76

Multiple Choice

Why do the products of service providers tend to be more customized than those of manufacturers?

• A) Differing customers have differing needs
• B) Because all customers are the same
• C) Technological innovations have reduced variability
• D) There is more capital required in service provision
• E) It is easy to measure productivity

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Definitions:

Debt-Equity Ratio

The ratio that evaluates the equity-versus-debt financing approach for company assets.

Return on Equity

A measure of financial performance calculated by dividing net income by shareholder's equity, indicating how well a company uses investments to generate earnings growth.

Total Debt

The sum of all owed liabilities, both current and long-term, that a company must eventually pay back.

Cash Coverage Ratio

A financial metric that measures a company's ability to cover its debt obligations with its available cash and cash equivalents.