Basics Beginner: Sources of Company Information

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1.
The amount a company earns from the investments of its shareholders is called return on equity.
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True. Return on equity indicates how well the investments are working for the company.
2.
The creditworthiness of a company is measured by _______.
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Debt-to-equity ratio. A low ratio indicates a secure investment.
3.
Net sales measures a company's liquidity.
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False. Net sales measures a company's total cash and credit sales minus any returns or discounts.
4.
Only shareholders can receive an annual company stockholder report.
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False. Anyone can call corporations directly to receive a copy of their stockholder report.
5.
A corporation's return on assets can be found in its annual stockholder report.
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True. Among many other data, such as net revenue and net earnings, is return on assets.