Which of the Following Statements About Operating Ratios (Which Can

question 84

Multiple Choice

Which of the following statements about operating ratios (which can be calculated from operating statements) is TRUE?

• A) By comparing operating ratios from one period to another, a firm can identify areas that may need special attention.
• B) These ratios are often used for control purposes.
• C) These ratios are calculated by dividing operating statement items by net sales.
• D) By comparing its operating ratios with competitors' ratios, a firm may be able to obtain a better idea of how it is doing.
• E) All of the above are true.

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Definitions:

Marginal Social Benefit

The additional benefit to society as a whole from producing or consuming one more unit of a good.

Public Good

A product or service that is provided without profit to all members of a society, either by the government or a private individual or organization, characterized by non-excludability and non-rivalry.

Marginal Social Cost

The total cost to society of producing an additional unit of a good or service.

Public Good

A good that is non-excludable and non-rivalrous, meaning no one can be effectively excluded from its use, and someone's use of it does not reduce its availability to others.