To Evaluate the Financial Performance of an Investment Center,a Business

question 120

Multiple Choice

To evaluate the financial performance of an investment center,a business needs key performance indicators that measure ________.

• A) manufacturing efficiency and product defect rate
• B) operating income and the use of the center's assets
• C) customer satisfaction and market share
• D) generation of sales revenues and control of operating expenses

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Definitions:

Vertical Analysis

A financial method that expresses each item in a financial statement as a percentage of a base figure from the same statement, typically used for income statements and balance sheets.

Liquidity

The ability of an asset to be quickly converted into cash without significant loss of value.

Horizontal Analysis

A financial analysis technique that compares line items in financial statements over a series of periods to identify trends and growth patterns.

Graphical Analysis

A technique involving the visual representation of data, allowing for the identification of patterns, trends, and relationships among variables.