Practice Quiz

NBE Funeral Service Director

Category - Arts - Marketing and Merchandising

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What process does a company use to determine if a business is profitable?
  1. Breakeven analysis
  2. Debt-to-equity ratio
  3. Quick ratio
  4. Cash flow analysis
Explanation
Answer: A - A breakeven analysis is used to determine the profitability of a company.

The breakeven analysis is a measure of profitability, determining when the amount of income (revenues) received by the business meets the amount of expenses. The debt-to-equity and quick ratios are measurements used to analyze the amount of debt in a business. The cash flow analysis looks at the presence of cash in the business necessary to meet current obligations.
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