What Is the Technique Called That Asks What a Result

question 38

Multiple Choice

What is the technique called that asks what a result will be if a predicted amount is not achieved or if an underlying assumption changes?

• A) Strategic analysis
• B) Ratio analysis
• C) Risk analysis
• D) Sensitivity analysis

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Definitions:

Operating Income

Earnings before interest and taxes (EBIT), calculated by subtracting operating expenses from gross profit.

Operating Cycle

The average time period between purchasing goods for inventory and receiving cash from selling those goods.

Accounts Receivables

Sums due to a company from its customers for products or services rendered but not yet compensated for.

Investing Activity

Operations concerning the buying and selling of long-term assets and other financial investments that do not qualify as cash equivalents.