If a Firm Increases Its Plowback Ratio This Will Probably

question 27

Multiple Choice

If a firm increases its plowback ratio this will probably result in a(n) ________ P/E ratio.

• A)higher
• B)lower
• C)unchanged
• D)Unable to determine

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Definitions:

Physical Flow

The actual movement of goods through a production process or supply chain.

Internal Control

Methods and practices put in place by an organization to guarantee the accuracy of financial and accounting data, encourage responsibility, and inhibit fraudulent activities.

Physical Inventory

The process of counting and verifying the actual quantities of goods in stock at a particular time.

Inventory Cost Formulas

Methods used to determine the cost of inventory sold and ending inventory value, such as FIFO (First-In, First-Out), LIFO (Last-In, First-Out), and weighted average cost.