Which of the Following Is an Example of Backward Vertical

question 68

Multiple Choice

Which of the following is an example of backward vertical integration?

• A) A stratup company created by an entrepreneur enters an industry
• B) A supplier firm chooses to enter its customers' business
• C) A foreign firm plans to enter a new geographic area
• D) A buyer firm decides to enter its supplier's business
• E) A local firm diversifies itself by entering a new industry

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Definitions:

EV/EBITDA Ratio

A valuation metric comparing a company's enterprise value to its earnings before interest, taxes, depreciation, and amortization, highlighting company profitability.

Geographically

Pertaining to or based upon the natural features, population, industries, etc., of regions or places.

Quick Ratio

A liquidity metric indicating a company’s capacity to meet short-term obligations with its most liquid assets without selling inventory.

Common Size Statements

Financial statements that present all line items as percentages of a common base figure rather than in absolute numbers, facilitating comparison across periods and companies.