It is generally more effective to evaluate total revenues against a measure of business activity than comparing current revenues with prior-year revenues.

Question

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Evaluating total revenues against a measure of business activity (such as units sold, customers served, or hours billed) provides a more accurate picture of a company's performance and efficiency, as it accounts for changes in the scale of operations, unlike comparing current revenues with prior-year revenues which may not account for changes in market conditions, prices, or business size.

It Is Generally More Effective to Evaluate Total Revenues Against