Managers of Every Company Should Be Willing and Ready to Modify

question 43

Multiple Choice

Managers of every company should be willing and ready to modify their strategy because

• A)market conditions and circumstances are changing over time or the current strategy is clearly failing.
• B)the task of crafting strategy is a one-time event.
• C)the strategic vision necessitates periodic updating.
• D)frequent changes in strategy make it very more difficult for rivals to imitate.
• E)all strategies are reactive.

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Definitions:

Du Pont Identity

A formula that breaks down return on equity into three component parts: profit margin, asset turnover, and financial leverage.

Profit Margin

A financial ratio that shows the percentage of revenue that exceeds the cost of goods sold, indicating the efficiency of a company in generating profit.

Operating Profit Margin

A profitability ratio calculated as operating income divided by revenue, indicating the percentage of revenue that is left over after paying for variable costs of production.

Cost of Goods Sold

Expenses directly incurred from the production of a company's sold goods, involving the cost of labor and materials.