Which of the following best represents value created for stockholders during the current period?
A)Retained earnings.
B)Total assets.
C)Net income.

Question

Quizplus · Accepted Answer

Net income represents the amount of profit generated during the current period which can be distributed as dividends or retained earnings to create value for stockholders. Retained earnings (choice A) is a part of net income that is kept within the company for future investments and growth, but it does not represent immediate value created for stockholders. Total assets (choice B) is a measure of the company's resources and does not necessarily indicate the value created for stockholders during the current period.

Which of the Following Best Represents Value Created for Stockholders