The Profitability Criterion Is Measured in Terms of Which of the Following

question 22

Multiple Choice

The profitability criterion is measured in terms of which of the following indexes?

• A)percentage change in sales
• B)return on net assets
• C)price/earnings ratio
• D)percentage cost savings from new processes

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Definitions:

Free Cash Flow

The amount of cash a company generates after accounting for cash outflows to support operations and maintain its capital assets.

Capital Expenditures

Funds used by a company to acquire or upgrade physical assets such as property, industrial buildings or equipment.

Cash Dividends

Payments made out of a corporation's earnings to its shareholders, typically in the form of cash.

Investing Activities

Transactions involving the purchase and sale of long-term assets and other investments not considered cash equivalents.