A Concentration Ratio Gives

question 296

Multiple Choice

A concentration ratio gives

• A) the average size of the firms in an industry.
• B) the total sales of four or eight of the mid-sized firms in the industry.
• C) the percentage of all sales contributed by the four or eight largest firms in the industry.
• D) the sales of the four largest firms in the industry divided by the sales of the eight largest firms in the industry.

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Definitions:

Formal Accounting

A systematic process for recording, summarizing, and reporting the financial transactions of an organization, adhering to standardized guidelines and principles.

Initial Capital

The amount of money that is invested in a business at the start, used to cover startup costs and initial operating expenses.

Cumulative Preferred Stock

A type of preferred stock whose dividends accumulate if not paid in a given year and must be paid out before common stock dividends.

Dividends Per Share

The amount of dividend that a company pays out to each shareholder, expressed on a per share basis.