Some Experts Suggest That a Small Business Should Maintain a Supply

question 134

True/False

Some experts suggest that a small business should maintain a supply of cash on hand equal to one-fourth its current debts.

---

Definitions:

Raw Materials Cost

The expense associated with obtaining the basic materials required for production before any processing or manufacturing is done.

Finished Goods Inventory

The inventory of products that have been manufactured and are ready to be sold to customers.

Production Needs

The specific requirements and quantities of materials, labor, and capacity required to manufacture products.

Sales

The total amount of a company's revenue generated from goods or services sold over a designated period.