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The Funnel Theory

question 27

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The funnel theory


Definitions:

Payout Ratio

Measures the percentage of earnings distributed in the form of cash dividends; computed by dividing cash dividends declared on common stock by net income.

Net Income

The amount of money remaining from revenues after subtracting all costs, expenses, and taxes, indicating the profit earned.

Dividends

Payments made by a corporation to its shareholder members, distributed from the company's profits.

Note Payable

A written agreement where one party promises to pay another a definite sum of money at a specified future date or on demand.

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