HLST 3250 Lecture Notes - Lecture 9: Gross Profit, Shares Outstanding, Profit Margin
19 Apr 2017
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Document Summary
Chapter 02 review of accounting: the income statement is the major device for measuring the profitability of a firm over a period of time. True false: the income statement measures the increase in the assets of a firm over a period of time. True false: sales minus cost of goods sold is equal to earnings before taxes. True false: sales minus cost of goods sold is equal to gross profit. True false: operating profit is essentially a measure of how efficient management is in generating revenues and controlling expenses. True false: dividing operating profit by shares outstanding produces earnings per share. True false: accounting income is based on verifiably completed transactions. True false: the p/e ratio is strongly related to the past performance of the firm. True false: when a firm has a sharp drop off in earnings, its p/e ratio may be artificially high.
