Peregrine Exam Day 4 Questions and Verified Answers| 100% Correct| Grade A+

retained earnings - An amount earned by a corporation and not yet distributed to stockholders. Business generate earnings that can be - postive and negative Retained Earnings Equation - Beginning Retained Earnings + Net Income - Dividends = Ending Retained Earnings Retained Earnings tell - A company generates surplus income Inventory Turnover - cost of goods sold/average inventory Inventory turnover helps - businesses make better decisions on pricing, manufacturing, marketing and purchasing new inventory. A low turnover implies - weak sales and possibly excess inventory High ratio turnover implies - either strong sales or insufficient inventory. Return on Assets - Indicates the amount of net income generated for each dollar invested in assets ROA is best used when - comparing similar companies or comparing a company to its previous performance. ROA takes into account - companies debt and Return on Equity ROA formula - Net Income/Total Assets