Please Refer to the Following Data: Which of the Following

question 29

Multiple Choice

Please refer to the following data: Which of the following statements is a valid conclusion based on this data?

• A)Profitability in 2014 took a dive as operating expenses increased by 30.8%.
• B)Profitability in 2014 improved greatly, as net income increased significantly as a percentage of sales.
• C)Net income in 2014 increased 12.6% over the prior year.
• D)Net income in 2014 went down because gross profit as a percentage of sales declined over the 2-year period.

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Definitions:

Equity Instrument

A type of financial security that signifies ownership in a company and represents a claim on part of the company's assets and earnings, such as stocks.

Market Participant

An entity or individual with the willingness and ability to buy, sell, or otherwise engage in transactions in a market.

Risk Aversion

The reluctance or avoidance of undertaking investment with uncertain outcomes, preferring outcomes that are more predictable.

Owner-Manager

An individual who both owns a significant part of a company and is actively involved in its management.