Regarding "Operating Statements," Which of the Following Statements Is FALSE

question 73

Multiple Choice

Regarding "operating statements," which of the following statements is FALSE?

• A) Stockturn rate can be calculated directly from a detailed operating statement.
• B) Gross margin must be larger than expenses for a business to make a profit.
• C) By comparing the results from one statement to another, management can see trends.
• D) The markdown ratio cannot be calculated directly from a detailed operating statement.
• E) The purpose of the operating statement is to determine the firm's ROI and ROA.

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Definitions:

Equilibrium Quantity

The quantity of goods supplied is equal to the quantity of goods demanded at the market price.

Demand Shifts

Changes in the demand curve due to factors other than the price of the good, such as changes in income, tastes, or prices of related goods.

Quantity Demanded

The total amount of a good that consumers are willing and able to purchase at a specific price in a given period.

Economy Moves

The dynamic changes and shifts in economic activity, including growth, recession, and recovery phases, within a country or globally.