An income ratio based on capital balances might be appropriate when

A) service is a primary consideration.
B) some but not all partners plan to work in the business.
C) funds invested in the partnership are considered the critical factor.
D) little net income is expected.

Income Ratio

A financial metric used to assess a company's ability to generate income relative to revenue, sales, assets, or equity.

Capital Balances

The amount of money or value of assets contributed by the owners or partners in a company, not including earnings or profits.

Service

An intangible product offered to customers that does not result in ownership of anything.