The Financial Statement Ratio That May Be of Greatest Interest

question 130

True/False

The financial statement ratio that may be of greatest interest to a company's stockholders is the amount of its return on equity.

---

Definitions:

Prime Costs

The sum of direct materials cost and direct labor cost, representing the primary costs involved in producing a product.

Finished Goods Inventory

The stock of completed products ready for sale but not yet sold, representing a current asset on the balance sheet.

Manufacturer

A company or individual that creates goods using raw materials and components through various processes, labor, and machinery.

Work in Process

Inventory that includes materials that are in the process of being manufactured but are not yet completed products.