Business Awareness Questions

The primary goal of a business firm is to maximize profit.

Ratio analysis helps us to evaluate various aspects of a company's operating and financial performance such as its efficiency, liquidity, profitability and solvency. The trend of these ratios over time can be used to check whether they are improving or deteriorating.

The price elasticity of supply measures how the responsiveness of the quantity demanded of a commodity to changes it its prices; defined as the percentage change in quantity demanded divided by the percentage change in price.

A market is said to be in equilibrium when market demand is equal to market Supply.

The factors that affect worker productivity include the size of incentive payments per non-defective pair, base pay increases, how favorably a company's compensation package compares with the industry-average compensation package, and expenditures for best practices training.

Capital budgeting is the process by which a company or an industry determines whether projects such as investing in R&D, opening a new branch, replacing a machine are worth pursuing. A project is worth pursuing if it increases the value of the company. Capital budgeting also known as investment appraisal. 

It is primarily concerned with evaluating investment alternatives.

Cottage industry is a manufacturing activity of people operated at home. The handcrafts which were sold in the society are examples of cottage industy products. It is a small scale industry in which the labor force is mostly family members or individuals.