Which of the following poses the MOST COMMON financial threat to local and regional businesses?
A) employee retention
B) undercapitalization
C) low productivity
D) limited customer base
E) inefficiency
B
Explanation: B) The most common challenge for local and regional businesses is managing money. A particular threat is undercapitalization, which occurs when a business owner cannot gain access to adequate funding. If the business cannot afford to produce goods or buy services, it will go bankrupt. Employee retention, low productivity, inefficiency, and access to customers may pose challenges for local and regional businesses, although not as severe as undercapitalization.
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All but one of the following is true of common-size income statements.
A) Each income statement item is standardized by dividing it by total assets. B) Income statement accounts are represented as percentages of sales. C) Each income statement item is standardized by dividing it by sales. D) Common-size financial statement analysis is a specialized application of ratio analysis.
List and describe three reasons for a low-dividend-payout policy
What will be an ideal response?