If an Analyst Wants to Know How Likely It Is

question 67

Multiple Choice

If an analyst wants to know how likely it is that a business would be able to pay off all its debts,which of the following statements would be MOST useful?

• A)Cash flow statement
• B)Balance sheet
• C)Statement of changes in equity
• D)Income statement

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Definitions:

Indirect Expense

Costs that are not directly attributable to a specific product or service, such as utilities or administrative salaries.

Rent

A periodic payment made by a tenant to a landlord in exchange for the use of land, a building, or other property.

Contribution Margin

The difference between sales revenue and variable costs, indicating how much revenue contributes to fixed costs and profits.

Gross Sales

The total amount of sales generated by a business before any deductions like returns, discounts, and allowances.