Managers Who Utilize Customer Profitability Charts Should Drop Customers That

question 129

True/False

Managers who utilize customer profitability charts should drop customers that generate a negative customer operating income, since dropping an unprofitable customer will automatically cause overall income to increase.

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Definitions:

Payout Ratio

The percentage of earnings paid to stockholders in dividends.

Tax Implications

The effects that various financial decisions and actions have on the amount of tax an individual or business owes to the government.

Proportionate Ownership

The share of ownership in a company or property based on the percentage of shares or units held relative to the total outstanding.

Shareholder's Wealth

The value of a company to its shareholders, often measured by the price of its shares multiplied by the number of shares outstanding.