Operating breakeven analysis deals with:
A) the assets and liabilities recorded in the pro forma balance sheet.
B) the net cash flows from operating activities recorded in the statement of cash flows.
C) the noncash items included in operating activities.
D) the revenues and expenses associated with a firm's normal production and selling operations.
E) the interest payments to bondholders and the dividend payments to preferred stockholders.

Question

Quizplus · Accepted Answer

Operating breakeven analysis is concerned with determining the level of sales or revenue a company must generate to cover all of its operating expenses and achieve a net income of zero. Therefore, it focuses on the revenues and expenses associated with a firm's normal production and selling operations. Choices A, B, C, and E all refer to other aspects of financial analysis and do not specifically relate to operating breakeven analysis.

Operating Breakeven Analysis Deals With