The Ratio That Uses Weighted-Average Number of Shares of Common

question 60

Multiple Choice

The ratio that uses weighted-average number of shares of common stock outstanding in the denominator is the:

• A) earnings per share.
• B) gross profit percentage.
• C) price-earnings ratio.
• D) current ratio.

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Definitions:

Fixed Expenses

Financial obligations that stay uniform in spite of changes in manufacturing or sales figures, like leasing expenses, salaries for workers, and insurance outlays.

Operating Leverage

A financial concept that measures a company's fixed costs as a percentage of its total costs, indicating how a change in sales will impact profits due to fixed expenses.

Wire Strippers

A hand tool used to strip the insulation from electric wires.

Manufacturer

A person or company that makes goods for sale, typically involving machinery and labor.