Ma1.Please give only typed answer. L. Assuming total asset turnover is revenue divided by average total assets, impairmentwrite downs of a company's long-lived assets will MOST LIKELY result in an increase inthe company's:a. Debt to equity ratiob. Total asset turnoverc. Both total asset turnover and debt to equity ratio

Total asset turnover ratio is calculated as Sales/Average assets and the impairment of a company's…

Answered: Assuming total asset turnover is…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter7: Operating Assets

Section: Chapter Questions

Problem 12MCQ: Which of the following statements is true? a. The fixed asset turnover ratio assists managers in...

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Which of the following statements is true? a. The fixed asset turnover ratio assists managers in determining the estimated future capital expenditures that are needed. b. The average age of the fixed assets is computed by dividing accumulated depreciation by depreciation expense. c. If net sales increases, the fixed asset turnover ratio will decrease. d. A relatively low fixed asset turnover ratio signals that a company is efficiently using its assets.
Match the correct term with its definition. A. cost principle i. if uncertainty in a potential financial estimate, a company should err on the side of caution and report the most conservative amount B. full disclosure principle ii. also known as the historical cost principle, states that everything the company owns or controls (assets) must be recorded at their value at the date of acquisition C. separate iii. (also referred to as the matching principle) matches expenses with associated revenues in the period in which the revenues were generated. D. monetary iv. business must report any business activities that could affect what is reported on the financial statements E. conservatism v. system of using a monetary unit by which to value the transaction, such as the US dollar. F. revenue vi. period of time in which you performed the service or gave the customer the product is the period in which revenue is recognized. G. expense vii. business may only report activities on financial statements that are specifically related to company operations, not those activities that affect the owner personally.
The cost of equity is _______. A. the interest associated with debt B. the rate of return required by investors to incentivize them to invest in a company C. the weighted average cost of capital D. equal to the amount of asset turnover
Defi ning total asset turnover as revenue divided by average total assets, all else equal, impairment write-downs of long-lived assets owned by a company will most likely result in an increase for that company in: B . the total asset turnover but not the debt-to-equity ratio
Defi ning total asset turnover as revenue divided by average total assets, all else equal, impairment write-downs of long-lived assets owned by a company will most likely result in an increase for that company in: A . the debt-to-equity ratio but not the total asset turnover.
Which of the following statements is NOT correct? Statement 1: Debt utilization ratios are used to evaluate the firm's debt position with regard to its asset base and earning power. Statement 2: The DuPont system of analysis emphasizes that profit generated by assets can be derived by various combinations of profit margins and asset turnover. Statement 3: Satisfactory return on assets may be achieved through high profit margins or rapid turnover of assets, but not a combination of both. A. Statement 1 only. B. Statement 2 only. C. Statement 3 only. D. All of the statements are NOT correct. E. All of the statements are correct.
Discuss how, in choosing the accounting methods below, the following ratios can be affected – rate of return on assets, quick ratio, profit margin, asset turnover: (a) a change in accounting method for depreciation from straight line to reducing balance. (b)revaluation of a non-current asset upwards at the beginning of the current year. (c) providing for an expected loss through obsolescence of certain items of merchandise inventory.
If an asset increases in value, the increase is noted as________. Select one: a. an increase in net profit in the statement of comprehensive income b. an increase in retained earnings in statement of financial position c. an increase in “other profit” in statement of comprehensive income d. an increase in revaluation surplus in the statement of financial position and other comprehensive income in the statement of comprehensive income
The company’s profitability on each dollar invested in assets is represented by which of the following ratios: a. Profit margin. b. Asset turnover. c. Return on assets. d. Return on equity.
Indicate the effects of the transactions listed, on current assets, current ratios and net income. Use (increase) to indicate an increase, (decrease) to indicate a decrease and (no effect) to indicate no effect or an indeterminate effect. A fixed asset is sold for more than book value. Net income will ______ Answer 1 A fully depreciated asset is retired. Net income will experience ______ An increase in inventory turnover ratio signifies _____________________ in a firm's efficiency. Merchandise is sold for cash. Total current assets will ________
4. Comment on the company’s ability to utilize its assets and manage its liabilities effectively using the following efficiency ratios a. Total Asset Turnoverb. Accounts Payable Turnoverc. Return on Total Assets (ROA)
The current ratio isa. calculated by dividing current liabilities by current assets. b. used to evaluate a company's liquidity and short-term debt paying ability c. used to evaluate a company's solvency and long-term debt paying ability. d. calculated by subtracting current liabilities from current assets.

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Assuming total asset turnover is revenue divided by average total assets, impairment write downs of a company's long-lived assets will MOST LIKELY result in an increase in the company's: a. Debt to equity ratio b. Total asset turnover c. Both total asset turnover and debt to equity ratio