Regarding "operating statements," which of the following statements is FALSE?
A) Stockturn rate can be calculated directly from a detailed operating statement.
B) Gross margin must be larger than expenses for a business to make a profit.
C) By comparing the results from one statement to another, management can see trends.
D) The markdown ratio cannot be calculated directly from a detailed operating statement.
E) The purpose of the operating statement is to determine the firm's ROI and ROA.

Question

Quizplus · Accepted Answer

The purpose of the operating statement is to show the financial performance of a business and help in decision-making, but it does not directly determine the firm's ROI (return on investment) or ROA (return on assets). These measures require additional calculations and information beyond the operating statement.

Regarding "Operating Statements," Which of the Following Statements Is FALSE