________ Is One Indication That a Small Business May Be

question 103

Multiple Choice

________ is one indication that a small business may be undercapitalized.

• A)A current ratio below 1:1
• B)A quick ratio above 2:1
• C)A debt-to-net worth ratio above 1:1
• D)A net-sales-to-working capital ratio equal to 3:1

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Definitions:

Brand Extension

A strategy whereby a company uses an existing brand name to launch a product in a different category, leveraging the brand's established image and following.

Pure Competition

A market structure characterized by a large number of small firms, homogeneity of products, and easy entry and exit, leading to perfect competition.

Commodity Products

Products that are largely interchangeable with others of the same type because they have no significant differentiation.

Market Price

The current price at which an asset or service can be bought or sold in the marketplace, determined by supply and demand dynamics.