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Lorico [155]
3 years ago
13

Companies HD and LD are both profitable, and they have the same total assets (TA), Sales (S), return on assets (ROA), and profit

margin (PM). However, Company HD has the higher debt ratio. Which of the following statements is CORRECT?
a. Company HD has a higher fixed assets turnover than Company LD.

b. Company HD has a lower equity multiplier than Company LD.

c. Company HD has a lower total assets turnover than Company LD.

d. Company HD has a higher ROE than Company LD.

e. Company HD has a lower operating income (EBIT) than Company LD.
Business
2 answers:
lakkis [162]3 years ago
7 0

Answer:

The correct option is D

Explanation:

Debt ratio is defined as the ratio of total debt to total asset. which means a company has more liabilities than assets.

So company HD will have a higher ROE because of them having a higher debt ratio.

Elden [556K]3 years ago
5 0

Answer:

D) Company HD has a higher ROE than Company LD.

Explanation:

This is easier to explain using an example:

                                           HD                               LD

total sales                          $100                            $100

profit margin                       10%                               10%

total assets                         $50                              $50

total liabilities                     $30                              $25

total equity                         $20                              $25

debt ratio                            0.6                               0.5

return on equity            = 10/20 = 50%            = 10/25 = 40%

Since company HD has a higher debt ratio, it means that stockholders' equity is lower compared to company LD. Since ROE measures how much profit is generated by each dollar invested, a lower denominator results in a higher ratio.  

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Answer:

Unemployment rate = 3.6%

Explanation:

Unemployment is the number of people who are willing to work and are actively seeking work but are unable to find it. The unemployment rate is the unemployed / total number of people in the labor force x 100.

In the above scenario, the unemployed is 3 million people. The others are either already employed, unavailable, unwilling or not seeking work.

The labour force comprises of those who are employed and unemployed, that is 80million + 3million = 83 million.

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When comparing the GDP of different countries, two issues immediately arise - currency and population differences. How does one
kykrilka [37]

Answer: Currency is converted to common currency, GDP is divide by population and compare GDP per Capita

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A company received 500 applications for a specific position.30 were given an assignment test. Only 15 were invited to an intervi
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All of the following are indicators that the vendor is acting as an agent instead of as a​ principal, except: A. The other party
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Answer:

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The City of Oxbow General Fund has the following net resources at year-end:
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Answer:

$1,622,000

Explanation:

Preparation of the fund balance section of the balance sheet.

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