Industry Standards for Financial Statement Analysis

question 49

Multiple Choice

Industry standards for financial statement analysis:

• A)Are based on a single competitor's financial performance.
• B)Are set by the government.
• C)Are available for the financial performance and condition of the company's industry.
• D)Are based on rules of thumb.
• E)Compare a company's income with its prior year's income.

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Definitions:

Make or Buy

A decision-making process used by companies to determine whether they should produce goods internally or purchase them from an external supplier.

Indirect Spend

Expenses incurred for materials, services, and maintenance that do not directly contribute to the production of goods.

Direct Spend

Expenses directly tied to the production of goods or services, such as raw materials and labor.

Outsourced

The practice of having certain job functions or processes handled outside of the company, typically by a third party, to reduce costs or focus on core competencies.