Stephen, a manager, believes that if his company's revenue hadn't increased last year, it wouldn't have been able to increase profits. The flaw in Stephen's thinking is that ________. Question 26 options: A) profits can also be increased by lowering costs, not just increasing revenue. B) the company can increase revenue by advertising more. C) profitability might not be the company's only objective. D) other similar companies have increased their profits, too. E) revenue doesn't contribute to profitability.

Revenue means the amount earned by selling the goods or services. Profit means the difference…

Answered: Stephen, a manager, believes that if…

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter10: Forecasting Financial Statement

Section: Chapter Questions

Problem 4QE: Suppose you are analyzing a firm that is successfully executing a strategy that differentiates its...

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Stephen, a manager, believes that if his company's revenue hadn't increased last year, it wouldn't have been able to increase profits. The flaw in Stephen's thinking is that ________.

Question 26 options:

A)	profits can also be increased by lowering costs, not just increasing revenue.

B)	the company can increase revenue by advertising more.

C)	profitability might not be the company's only objective.

D)	other similar companies have increased their profits, too.

E)	revenue doesn't contribute to profitability.

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