Profit Growth Is Measured by

question 113

Multiple Choice

Profit growth is measured by

• A)dividing the net profits of the firm by total invested capital.
• B)subtracting the previous year's gross profit from the current year's gross profit.
• C)calculating the difference between the previous year's profitability and the current year's profitability.
• D)the percentage increase in net profits over time.
• E)adding the profitability of the last two fiscal years.

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Definitions:

Assets

Resources owned or controlled by a business or an individual, which are expected to produce economic value or benefit in the future.

Additional Shares

Shares issued by a company in addition to its existing shares, often to raise extra capital.

Financial Reporting

Generating documents that communicate a company's economic situation to its leadership, shareholders, and regulatory agencies.

External Decision Makers

Individuals or organizations outside of a company (e.g., investors, creditors, regulators) who use the company’s financial information to make decisions about engaging with the company.