A firm with a substandard net profit margin can improve its return on total assets by O increasing its debt ratio. decreasing its fixed asset turnover. O increasing its total asset turnover. decreasing its total asset turnover.
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- A firm with a substandard return on total assets can improve its return on equity, all else remaining the same, but A. decreasing its total asset turnover. B. increasing its total asset turnover. C. increasing its debt ratio. D. decreasing its debt ratio.A firm with a below industry net profit margin can improve its return on total assets by: a. increasing its current ratio c. decreasing its fixed asset turnover b. decreasing its total asset turnover d. increasing its total asset turnoverIf a firm decreases its operating costs, all else constant, then the: A. profit margin will decrease.B. return on assets will decrease.C. total asset turnover rate will increase.D. cash coverage ratio will decrease.E. price-earnings ratio will decrease Can you give me detailed explanation?
- Suppose a company’s return on invested capital is less than itsWACC. What happens to the value of operations if the salesgrowth rate increases?Suppose a company’s return on invested capital is less than itsWACC. What happens to the value of operations if the salesgrowth rate increases? Explain your answer.If a firm wishes to retain the same return on equity when its net profit margin and total asset turnover has declined, it must ____. a. increase its equity multiplier b. decrease its equity multiplier c. reduce sales and increase assets d. increase sales and increase assets
- Which of the following statements is usually correct? A low receivables turnover is good for the business The lower the total debt-to-equity ratio, the lower the financial risk for a firm The higher the tax rate for a firm, the lower the interest coverage ratio An increase in net profit margin with no change in sales or assets means a poor ROIA firm that is increasing its capital structure leverage and increasing profitability will likely experience a (an) a. increasing value-to-book ratio b. decreasing return on assets c. volatile price-earnings ratio d. None of these answer choices are correct.Assuming that the net sales and profit remain the same, a company’s return on investment would decrease if the invested capital decreases increase if invested capital increases increase if the invested capital turnover rate increases increase if the invested capital turnover rate decreases
- Which of the following statements is most correct?(a) Generally, firms with high profit margins have high asset turnover ratios.(b) Having a high current ratio and a high quick ratio is always a good indication a firm is managing its liquidity position well.(c) Knowing that return on assets {ROA) measures the firm's effective utilization of assets without considering how these assets are financed, two firms with the same EBIT must have the same ROA.(d) One way to improve the current ratio is to use cash to pay off currentliabilities.Which of the following would increase a company’s additional financing needed (AFN)? a) the company’s profit margin increases b) the company’s dividend payout ratio decreases c) the company’s profit margin decreases d) the company has a lot of excess asset capacity e) none of the aboveWhich of the following statements is most correct? Select one: A. A company with a current ratio of 0.5, should purchase additional inventory on credit if it wants to improve this ratio. B. Return on assets is a function of two variables, the profit margin and current asset turnover. C. A company with a current ratio of 0. 5, should sell some of the existing inventory at cost if it wants to improve this ratio. D. Firms with low rates of return on stockholders’ equity tend to sell at relatively high ratios of market price to book value.