When a Company Buys Back and Retires Its Own Shares

question 166

True/False

When a company buys back and retires its own shares, those shares are said to be issued but not outstanding.

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Definitions:

Current Ratio

A financial metric assessing a firm's capacity to settle short-term debts using its existing assets.

Liquidity Ratios

Liquidity ratios are financial metrics used to assess a company's ability to meet its short-term obligations by comparing its liquid assets to its current liabilities.

Equity Multiplier

A financial ratio that measures a company's total assets financed by shareholders' equity, indicating the level of leverage used by the company.

Inventory Turnover Ratio

A measure of how frequently a company sells and replaces its stock of goods in a given period.