On Her Way to Work,the Owner of a Local Service

question 21

Essay

On her way to work,the owner of a local service organization heard the term "benchmarking" on a local radio news program.Recognizing that you were knowledgeable about benchmarking,the owner called you into her office and asked you to explain the term to her and to help her understand why her service organization should use benchmarking.What would you tell her about benchmarking and why service organizations should use it?

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Definitions:

Debt-Equity Ratio

A measure of a company's financial leverage calculated by dividing its total liabilities by stockholders' equity.

Residual Dividend Policy

A strategy where dividends paid to shareholders are set based on the earnings left over after all operational costs and working capital needs are met.

Retained Earnings

Profits that a company has decided to keep or reinvest in the business instead of distributing to shareholders as dividends.

Reverse Split

Procedure where a firm’s number of shares outstanding is reduced.