Because the Number of Shares of Common Stock Outstanding During

question 12

True/False

Because the number of shares of common stock outstanding during the year can fluctuate, computing return on common stockholders' equity is not a useful indicator of profitability.

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Definitions:

Total Assets

The sum of all assets owned by a company, including cash, investments, equipment, and property, as recorded on the balance sheet.

Accounts Receivable

Receivables from clients to a corporation for goods delivered or services rendered, pending payment.

Cash

A company's most liquid asset, consisting of currency held and deposits in bank accounts, used for transactions or as reserve for future payments.

Liabilities

Economic responsibilities or liabilities a corporation has towards others, necessitating settlement over time by transferring assets such as cash, products, or services.