What Are the Main Issues to Be Addressed in a Business

question 115

Essay

What are the main issues to be addressed in a business code of ethics required by the SEC?

Calculate contribution margin per unit, contribution margin ratio, and variable expense ratio.

Forecast net operating income based on changes in sales volume, selling price, variable costs, and fixed costs.

Calculate the margin of safety in dollars and percentage.

Apply changes in the business environment (e.g., sales incentives, price changes, advertising budget adjustments) to predict their effect on net operating income.

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Definitions:

Positive Variance

The difference between actual performance and expected performance where the actual outcome is more favorable than what was anticipated.

Weights

In finance, it refers to the proportion of each component's value in a portfolio or in a weighted average calculation.

Expected Return

The probable return on an investment, taking into account all possible outcomes or the aggregate return that an investor anticipates over a certain period.

Systematic Risk

The risk inherent to the entire market or market segment, also known as market risk or un-diversifiable risk.