Under Which of the Following Cases May a Percentage Change

question 169

Multiple Choice

Under which of the following cases may a percentage change be computed?

• A) There is no amount in the base year.
• B) There is a negative amount in the base year and a negative amount in the subsequent year.
• C) The trend of the amounts is decreasing but all amounts are positive.
• D) There is a negative amount in the base year and a positive amount in the subsequent year.

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Definitions:

Cash Cycle

The time period between the outlay of cash for the production process and the collection of cash from customers.

Fixed Asset Requirements

The necessary investments in long-term assets like property, plant, and equipment that a business needs to carry out its operations.

Return On Assets

A financial ratio indicating how profitable a company is relative to its total assets, calculated by dividing net income by total assets.

Operating Cycle

The duration between a company's purchase of inventory and the collection of accounts receivable generated from sales of that inventory.