Customer Profitability Analysis (CPA)is Best Conducted with the Tools of an Accounting

question 59

True/False

Customer profitability analysis (CPA)is best conducted with the tools of an accounting technique called activity-based costing (ABC).

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Definitions:

Consolidated Earnings

The aggregate amount of net income earned by a parent company and its subsidiaries, reported as a single figure in the parent's financial statements.

Diluted Earnings

Net income available to common shareholders, adjusted for the potential impact of convertible securities, options, and warrants, showing earnings per share if all convertibles were exercised.

Investing Section

Part of the cash flow statement that reports the acquisition and disposal of long-term investments and property, plant, and equipment.

Operating Section

The part of the income statement that displays the revenues and expenses directly related to the core business operations.