Gross profit margin is a better measure of profitability than return on equity (ROE). Select one: True or False
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19.
Gross profit margin is a better measure of profitability than return on equity (ROE).
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- Higher the ratio, the more favorable it is, doesn’t stand true for Select one: a. Net profit ratio b. Operating ratio c. Liquidity ratio d. Stock turnover ratioWhich of the following is NOT a profitability ratio? Select one:a. Return on Equityb. Net Profit Marginc. Return on Assetsd. Average Collection Period44-Which of the following is correct? a. Retained earnings are cost free b. Retained Earnings are cheaper than External Equity c. External Equity is cheaper than Internal Equity d. Retained Earnings are costlier than External Equity
- Which one of the following is most closely related to the net present value profile? A: Payback B: Discounted payback C: Profitability index D: Average accounting return E: Internal rate of returnH7. Which of the following ratios does not use net income in its calculation? Multiple Choice Net profit margin Earnings per share Return on equity Fixed asset turnover Explain also wrong options and explain with detailsTrue or False Returns from the overall market can be thought of as a combination of three factors: operating profit, significant expansion or contraction and amount of dividends
- Define cost of equity? How does it relate to the ‘required rate of return’ (r) on equities?The cost of equity is easier to estimate than the cost of either debt or preferred stock. True FalseWhich of the following statements are true about the interest-burden ratio? Check all that apply: It can be expressed as EBIT/Interest Expense. If the company has no financial leverage, the interest-burden ratio will be equal to 0. A company with higher financial leverage will have a lower interest-burden ratio. If the company has no financial leverage, the interest-burden ratio will be equal to 1. It can be expressed as Net profits/Pretax profits.
- Is it true that All else being equal, an increase in profit margin raise ROE?11. Which best describes the gross margin ratio? a) LEVERAGE RATIO b) LIQUIDITY RATIO c) COVERAGE RATIO d) PROFITABILITY RATIOWhich of the followings is not one of the components of ROE under the Du Pont analysis/identity? Select one:a. Profitabilityb. Efficiencyc. Liquidityd. Equity multiplier
