Return on Assets Is a Very Important Analytical Tool Because

question 10

True/False

Return on assets is a very important analytical tool because it measures how effectively management is using a firm's assets to generate profits.

---

Definitions:

Dividend

Money distributed to shareholders by a company, usually sourced from its profits.

Cumulative Preferred Stock

A type of preferred stock that accumulates unpaid dividends, which must be paid out before any dividends can be distributed to common stockholders.

Common Stock

A type of equity security that represents ownership in a corporation, giving holders voting rights and a share in the company's profits through dividends.

Dividend

A share of a company's profits distributed to its shareholders, usually paid in cash or additional stocks.