How does the use of current liabilities enhance profitability and also increase the firm's risk of default on its
financial obligations?
What will be an ideal response?
Other things remaining the same, the greater the firm's reliance on short-term debt or current liabilities in financing its
assets, the greater the risk of illiquidity. However, the use of current liabilities offers some very real advantages in that
they can be less costly than long-term financing, and they provide the firm with a flexible means of financing its
fluctuating needs for assets. A firm can reduce its risk of illiquidity through the use of long-term debt at the expense of
a reduction in its return on invested funds. Once again we see that the risk-return trade-off involves an increased risk
of illiquidity versus increased profitability.
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Which of the following is NOT a principle developed by Arthur W. Page for successful corporate public relations?
A) to create a system that draws questions and criticism from employees and outside publics up through the organization to management B) to make sure that management softens bad news, especially for employees, stockholders, and community members C) to prepare "contact employees" with knowledge needed to be reasonable and polite with the public D) to create a system that informs all employees about an organization's policies and practices
What are the benefits of ISO certification?
What will be an ideal response?