Growth in Revenue Is an Important Factor for Many Companies

question 70

Multiple Choice

Growth in revenue is an important factor for many companies.The desired outcome in many businesses is for revenue and possibly net income to increase at a rate at least equal to the prior year's increase.Which of the following best explains this desire?

• A)If the company does not meet this level of growth,it is an indication that the company may not be able to meet the dividend expectations of investors
• B)Outsiders,particularly stockholders expect this level of growth,and if companies fail to meet these targets,their stock price may drop as investors sell their stock and find other companies who can meet the growth level desired
• C)Management is concerned that failure to achieve expected levels of growth may result in management not receiving anticipated bonuses
• D)Management is concerned that if the company does not achieve the expected increase in growth,that the auditors will demand a higher fee and expend greater effort in attempting to find misstatements in the financial statements

---

Definitions:

Blake and Mouton

The creators of the Managerial Grid Model, which is a tool for assessing leadership styles based on concern for people and concern for production.

Managerial Style

The individual approach adopted by a manager or leader in overseeing and directing employees and operations within an organization.

Country Club

An organization or venue providing recreational sports and socializing facilities to its members.

Followership

describes the role or behaviors of individuals who support and are guided by a leader, contributing to the achievement of group or organizational goals.