Which statement is true?

Which statement is true?

• A. Objectives are the steps that must be taken in order to attain goals.
• B. A net capital ratio greater than one indicates the business is solvent.
• C. Comparative analysis is comparing ratios over time for the same farm business.
• D. Short term goals may require more than one year to achieve.

Answer: (A)

Objectives are the steps you take to attain goals. They turn a broad aim into concrete, actionable actions with measurable outcomes and deadlines, making progress trackable. For a farm business, if the goal is to improve profitability next year, objectives might include increasing milk production by a certain amount, reducing feed costs per unit of output, and adopting a new marketing contract. Each objective should be specific, measurable, and time-bound so you can monitor progress and adjust as needed. The other statements don’t fit as well. A net capital ratio above one doesn’t by itself guarantee solvency, since solvency is about long-term financial health and positive net worth, which depends on how liabilities relate to assets. Comparative analysis involves more than just tracking one metric over time for a single farm; it also uses benchmarks and comparisons across entities or periods. Short-term goals are generally defined as targets achievable within one year, so suggesting they may take more than a year conflicts with common practice.

Objectives are the steps you take to attain goals. They turn a broad aim into concrete, actionable actions with measurable outcomes and deadlines, making progress trackable. For a farm business, if the goal is to improve profitability next year, objectives might include increasing milk production by a certain amount, reducing feed costs per unit of output, and adopting a new marketing contract. Each objective should be specific, measurable, and time-bound so you can monitor progress and adjust as needed.

The other statements don’t fit as well. A net capital ratio above one doesn’t by itself guarantee solvency, since solvency is about long-term financial health and positive net worth, which depends on how liabilities relate to assets. Comparative analysis involves more than just tracking one metric over time for a single farm; it also uses benchmarks and comparisons across entities or periods. Short-term goals are generally defined as targets achievable within one year, so suggesting they may take more than a year conflicts with common practice.