The Return on Investment (ROI)formula Focuses on the Amount of Operating

question 28

True/False

The Return on Investment (ROI)formula focuses on the amount of operating income earned before other revenue/expense items such as interest expense.

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Definitions:

Par Stock

A system that establishes a minimum level of inventory that must be on hand at all times to adequately serve customer needs.

Cumulative Preferred Stock

A type of preferred stock that entitles shareholders to receive dividends in arrears before any dividends can be distributed to common stockholders.

Par Common Stock

The nominal or face value assigned to common shares by the company's charter, which has little relation to the market value of the shares.

Stock Dividend

A dividend payment made in the form of additional shares rather than a cash payout.