Costs That Increase as a Firm Acquires Additional Current Assets

question 21

Multiple Choice

Costs that increase as a firm acquires additional current assets are called ________ costs.

• A) carrying
• B) shortage
• C) order
• D) safety
• E) trading

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Definitions:

Earnings per Share

A company's net profit divided by the number of its outstanding shares, indicating the profitability on a per-share basis.

Dividend Payout Ratio

The portion of net income distributed to shareholders in the form of dividends, expressed as a percentage of the company's total net income.

Book Value per Share

A financial measure that indicates the theoretical value per share of a company if it were to liquidate, calculated by dividing total equity by the number of outstanding shares.

Price-earnings Ratio

A valuation metric for companies, calculated by dividing the current market price of a stock by its earnings per share (EPS).