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Major financial ratios for organizational control include all of the following EXCEPT:

A) liquidity
B) leverage.
C) breakeven analysis.
D) profitability.

1 Answer

1 vote

Final answer:

Breakeven analysis, unlike liquidity, leverage, and profitability ratios, is not a financial ratio but a cost accounting tool used to determine the sales amount required to cover costs.

Step-by-step explanation:

Major financial ratios for organizational control include a variety of measures that help assess the financial health and performance of a business. These ratios typically encompass liquidity ratios, such as the current ratio and quick ratio; leverage or debt management ratios, like debt to equity and times interest earned; and profitability ratios, including return on assets and net profit margin. However, C) breakeven analysis is not considered a financial ratio but rather a cost accounting tool that calculates the point at which total costs and total revenue are equal, resulting in no net gain or loss for the business.

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