1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Natali5045456 [20]
3 years ago
14

You observe that a firm's ROE is above the industry average, but both its profit margin and equity multiplier are below the indu

stry average. Which of the following statements is CORRECT?
a. Its total assets turnover must be above the industry average.
b. Its total assets turnover must equal the industry average.
c. Its total assets turnover must be below the industry average.
d. Its return on assets must equal the industry average.
e. Its TIE ratio must be below the industry average.
Business
1 answer:
love history [14]3 years ago
3 0

Answer:

The correct option is "a".

Its total assets turnover must be above the industry average.

Explanation:

Return on equity = profit margin * asset turnover* equity multiplier

Return on equity (ROE) is a measure of financial performance calculated by dividing net income by shareholders' equity. Because shareholders' equity is equal to a company’s assets minus its debt, ROE could be thought of as the return on net assets.

ROE is considered a measure of how effectively management is using a company’s assets to create profits.

If ROE is above the industry average, this means that the company's management is above average at using the company’s assets to create profits.

You might be interested in
How does context influence your communication? Consider the language and culture people grew up with, and the role these play in
Lelu [443]

Answer and explanation:

<em>Language </em>and <em>culture </em>affect directly in people's communication. Somebody who grew up in the jungle surrounded by its people is likely to have an open way of communicating with others since that individual has grown up within a society that is in great part his or her family. On the other hand, someone who is raised in a metropolis is likely to be more careful while communicating with others since that person is more exposed to different people with different cultures that react differently to situations.

5 0
3 years ago
Sells Company accounts for its investment in OFO, Inc. under the available-for-sale method. How should Sells Company record a ca
ohaa [14]

Answer:

the journal entry should be:

Dr Cash X

    Cr Dividend revenue X

When a company holds securities as an investment and classifies them as available for sale (AFS), any dividends received will be recorded as revenue.

Dividend revenue is reported in the income statement.

7 0
3 years ago
Ritchie Manufacturing Company makes a product that it sells for $200 per unit. The company incurs variable manufacturing costs o
NARA [144]

Answer :

Break even units = 10,500

Break even amount = $2,100,000

Explanation :

As per the data given in the question,

a) Break even units = Fixed expense ÷ CM per unit b ÷ (a - c)

= ($466,000 + $269,000) ÷ ($200 - $110 - $20)

= 10,500 units

b) Break even amount = b ÷ (a ÷ c)

= ($466,000 + $269,000) ÷ ($70 ÷ $200)

= $2,100,000

Contribution margin ratio = Contribution margin ÷ Selling price per unit × 100

where,

Contribution margin = Selling price per unit - variable expenses per unit

c) CM per unit Break even units = Fixed expense ÷ Cm per unit

= $735,000 ÷ $70

= 10,500 units

Break even dollars = Fixed expense ÷ Contribution margin ratio

= $735,000 ÷ 0.35

= $2,100,000

d) Contribution margin income statement:

Sales = 10,500 × $200 = $2,100,000

Less Variable expenses 10,500 × ($110+$20) = $1,365,000

Contribution margin $735,000

Less Fixed Expense $735,000

Net Operating Income = $0

6 0
3 years ago
Art Company issued 6%, 5 year bonds, with par value of $1,600,000, paying semiannual interest for $1,470,226. The annual market
Soloha48 [4]

Answer:

The correct answer is option (B).

Explanation:

According to the scenario, the given data are as follows:

Bond carrying value = $1,470,226

Rate of interest = 8%

Rate of interest (Semiannual ) = 4%

So, we can calculate the the bond interest expense on the first interest payment by using following formula:

The bond interest expense = Bond carrying value × rate of interest (semiannual)

By putting the value we get

= $1,470,226 × 4%

= $58,809

6 0
3 years ago
Survey data can be collected with questionnaries. Which type of question has a limited number of preselected responses?
Stella [2.4K]
No question has a limited number of questions
if this is wrong I apologize
6 0
3 years ago
Other questions:
  • Step Up Ladders Company provides the following financial​ information: Income from operations ​$400,000 Interest expense ​47,000
    12·1 answer
  • Discuss the reasons due to which cash book and passbook balances may not match. Is there a method to address the issues related
    12·1 answer
  • Jeanine Baker makes floral arrangements. She has 18 different cut flowers and plans to use 7 of them. How many different selecti
    14·1 answer
  • On July 1, Aloha Co. exercises a call option that requires Aloha to pay $408,000 for its outstanding bonds that have a carrying
    5·1 answer
  • Skor Co. leased equipment to Douglas Corp. on January 2, 2011 for a 7-year period expiring December 31, 2017. Equal payments und
    6·1 answer
  • You have a small business that makes $50,000 accounting and economic profit for you. As a disabled person, you must work at home
    13·1 answer
  • Suppose that Tony Hsieh noticed that Zappos’s customers were no longer willing tov pay full retail prices on shoes. What actions
    12·1 answer
  • Which of the following would not be found in a schedule of noncash investing and financing activities, reported at the end of a
    13·1 answer
  • FCIA deduction consists of
    13·1 answer
  • a manufacturer conducts marketing research and estimates that consumers will accept a price of $50 for a pair of sunglasses. if
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!