Inventory Is Considered an Asset as It Can Usually Be

question 17

True/False

Inventory is considered an asset as it can usually be turned into cash rather easily through selling it to a customer or vendor for cash, who then may sell it to their customer.

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Definitions:

Dividend Payout Ratio

A financial ratio that shows the percentage of earnings a company pays to its shareholders in the form of dividends.

Internal Growth Rate

The maximum rate at which a company can expand its operations using only internally generated funds, without resorting to external financing.

ROE

Return on Equity is an indicator of a company's profitability, demonstrating the amount of profit generated from the shareholders' investments.

ROA

Return on Assets, a financial ratio indicating the profitability of a company relative to its total assets, measuring how effectively the company is using its assets to generate earnings.