The Segment Return on Assets

question 50

Multiple Choice

The segment return on assets:

• A)Is applicable whether segments earn profits or losses.
• B)Reflects on the profitability of a segment.
• C)Is difficult to calculate because companies with traded stock are not required to report segment information.
• D)Is calculated as segment average assets divided by segment operating income.
• E)Is calculated as segment sales divided by segment average assets.

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Definitions:

Authorized Shares

The maximum number of shares that a corporation is legally permitted to issue, as outlined in its articles of incorporation.

Noncumulative

Pertains to certain preferential shares or rights that do not have the feature of accumulating unpaid dividends or benefits, contrasting with cumulative counterparts.

Preferred Stock

A type of stock that provides holders with certain privileges over common stockholders, typically with fixed dividends and priority in asset distribution upon liquidation.

Par Value

The face value of a bond or a stock's stated value per share, which may bear no relation to its market value.