The Financial Statements of a Firm That Uses More Aggressive

question 133

Multiple Choice

The financial statements of a firm that uses more aggressive accounting practices would be likely to report:

• A)Higher profitability.
• B)Higher dividends.
• C)Higher liabilities.
• D)Fewer total assets.

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Definitions:

Dividend Yield

A financial ratio that indicates how much a company pays out in dividends each year relative to its share price, serving as a measure of return on investment.

Earnings Per Share

A financial ratio that calculates the portion of a company’s profit allocated to each outstanding share of common stock, serving as an indicator of a company's profitability.

Market Value

The present cost at which a good or service is available for purchase or sale in the market.

Price-earnings Ratio

A valuation metric for assessing a company's current share price relative to its per-share earnings.