What Is a Company's Unique Responsibility to Its Stockholders

question 72

Multiple Choice

What is a company's unique responsibility to its stockholders?

• A) to make a profit
• B) to produce products that the public will find useful
• C) to provide jobs to workers
• D) to create a stable balance sheet between income and expenses
• E) to be a good corporate neighbor

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Definitions:

Asset Turnover Ratio

A financial metric that measures the efficiency of a company in using its assets to generate sales.

Profit Margin

A financial metric that measures the percentage of revenue that exceeds the cost of goods sold, indicating the profitability of a company.

Accounts Receivable Turnover

A financial ratio that measures how efficiently a company collects receivables or the speed of their customer payments.

Average Receivables

A measure that summarises the average amount of accounts receivable over a specific period, often used to assess the effectiveness of a company's credit and collection policies.