Multiple Choice
Which of the following best represents 'Net Sales' for Better-Bald Inc. on its income statement?
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4. Merchandising Operations
Net Sales
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Which of the following is NOT typically used as a measure to judge a company's performance?
A
Net Sales
B
Number of Employees
C
Gross Profit Margin
D
Return on Equity (ROE)
Verified step by step guidance1
Understand the context of the question: The problem is asking which measure is NOT typically used to judge a company's performance. This requires identifying measures that are financial metrics versus those that are operational metrics.
Review the provided options: Net Sales, Gross Profit Margin, and Return on Equity (ROE) are all financial metrics commonly used to evaluate a company's performance. These metrics provide insights into revenue, profitability, and shareholder returns.
Analyze the option 'Number of Employees': This is an operational metric rather than a financial one. While the number of employees can indicate the scale of operations, it is not directly tied to financial performance or profitability.
Clarify why financial metrics are preferred: Financial metrics like Net Sales, Gross Profit Margin, and ROE are quantifiable measures that directly reflect a company's ability to generate revenue, manage costs, and provide returns to shareholders. Operational metrics like 'Number of Employees' do not provide this direct financial insight.
Conclude that 'Number of Employees' is the correct answer because it is not typically used as a financial performance measure, unlike the other options provided.
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