If the Target Firm's Ratio of Bad Debt Reserves as a Percent

question 8

True/False

If the target firm's ratio of bad debt reserves as a percent of projected revenue is increasing,the analyst can be confident that the firm is boosting revenue by not reserving enough to cover probable future losses.

---

Definitions:

Constitution

A system of fundamental principles or established precedents according to which a state or other organization is governed.

Federalism

Federalism is a political system where power is divided between a central government and smaller political units, such as states.

Authority

The capability or privilege to direct actions, decide on matters, and command adherence.

Govern

To officially and legally direct or control policies, actions, or the functioning of a state, community, or organization.