An Increase of Operating Profit from One Year to the Next

question 121

True/False

An increase of operating profit from one year to the next indicates a company's strategy was successful.

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Definitions:

Break-Even Point

The point at which total revenues equal total costs, and the business is neither making a profit nor incurring a loss.

Fixed Costs

Expenses that do not change with the level of goods or services produced over the short term.

Sales Ratio

A metric that compares a particular figure or cost to the total sales, providing insight into various financial aspects of a business.

Variable Costs

Expenditures that fluctuate based on the volume of output or services provided by an enterprise.