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galina1969 [7]
3 years ago
10

Decision makers and analysts look deeply into profitability ratios to identify trends in a company’s profitability. Profitabilit

y ratios give insights into both the survivability of a company and the benefits that shareholders receive. Identify which of the following statements are true about profitability ratios. Check all that apply.O If a company has a profit margin of 10%, it means that the company earned a net income of $0.10 for each dollar of sales.
O An increase in the return on assets ratio implies an increase in the assets a firm owns.
O If a company's operating margin increases but its profit margin decreases, it could mean that the company paid more in interest or taxes.
O If a company issues new common shares but its net income does not increase, return on common equity will increase.
Business
1 answer:
ahrayia [7]3 years ago
4 0

Answer:

  • If a company has a profit margin of 10%, it means that the company earned a net income of $0.10 for each dollar of sales.  A 10% PROFIT MARGIN MEANS THAT THE COMPANY EARNED 10 CENTS FOR EVERY DOLLAR OF REVENUE.
  • If a company's operating margin increases but its profit margin decreases, it could mean that the company paid more in interest or taxes.  OPERATING PROFIT = GROSS PROFIT - FIXED COSTS, NET PROFIT = OPERATING PROFIT - (INTERESTS AND TAXES). IF TAXES OR INTERESTS INCREASE, NET PROFITS DECREASE

Explanation:

there are several profitability ratios, the most important ones are:

  1. profit margin = net profit / total revenue
  2. gross profit margin = gross profit / total revenue
  3. return on equity = net income / total shareholder equity
  4. return on assets = net income / total assets

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consider a firm that produces units of output using capital and labor. due to changes in market conditions, it has decided to re
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A firm that produces units of output using capital and labor to determine  its total costs will decline by doing so, the firm will evaluate its:<u> Marginal cost Function .</u>

<u></u>

Option C is correct .

Marginal cost is the change in cost due to producing on excess unit of affair. To determine how big its total cost decline, the establishment will estimate its marginal cost function.

<h3>Marginal cost function :</h3>

Marginal cost represents the gradual costs incurred when producing fresh units of a good or service. It's figured by taking the total change in the cost of producing further goods and dividing that by the change in the number of goods produced.Marginal cost is calculated as the aggregate charges needed to manufacture one fresh good. thus, it can be measured by changes to what charges are incurred for any given fresh unit.<u> Marginal Cost</u><u> = Change in</u><u> Total Charges ÷</u><u> Change in volume of Units Produced.</u>

Question is incomplete ,missing option is given below :

Consider a firm that produces units of output using capital and labor. Due to changes in market conditions, it has decided to reduce its daily output from 5 units to 4 units. To determine how much its total costs will decline by doing so, the firm will evaluate its: Group of answer choices

A.marginal product function

B.average product function

C.marginal cost function

D.average total cost function

E.average variable cost function

Learn more about Marginal cost function :

brainly.com/question/17481520

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When your local Internet service provider increased its monthly charge from $40 to $50, the number of subscribers fell from 2,00
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Explanation:

Based on the information given, we would calculate the elasticity of demand which would be:

= (Change in Quantity / Change in Price) (Initial Price/ Initial Quantity)

Change in Quantity = 1800 - 2000 = -200

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Initial Price = 40

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Elasticity of demand would then be:

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