Which of the Following Factors Is a Primary Indicator Used

question 39

Multiple Choice

Which of the following factors is a primary indicator used to choose a functional currency?

• A)Autonomy of the subsidiary
• B)Proportion of intercompany transactions
• C)Sources of competitive forces and regulations
• D)Ability of subsidiary to generate cash flows to service its debts

Identify the limitations of reliance on a single financial ratio for liquidity assessment.

Interpret the relevance of profitability ratios in evaluating management's operational effectiveness.

Compare company data with industry averages to assess a company's market standing.

Understand the impact of the profit margin ratio and the asset turnover ratio on a company's return on assets.

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Definitions:

Camouflaged Verbs

Verbs that are transformed into nouns or adjectives, often making sentences more complicated and harder to understand.

Acquisition

The process of gaining possession or control of something, such as a company purchasing another company or assets.

Liquidate

To convert assets into cash, often in the context of closing a business or paying off debt.

Abstract Words

Abstract words represent concepts or ideas that do not have a physical form, making them subjective and often open to interpretation.