How to incease profitability if PE Ratio, EPS Ratio, and ROE cannot be calculated because of its unprofitability?

Q: What is the chief disadvantage of ROI as an investmentcenter performance measure? How does the…

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Q: Whether the firm uses the​ market-based approach or the​ cost-based approach for pricing​ decisions,…

A: Introduction: Market based approach: For calculating the selling price of Asset firm uses market…

Q: Why Sales revenue does not include the residual value?

A: The residual value, also known as salvage value, is the estimated value of a fixed asset at the end…

Q: What are important profitability ratios?

A: Ratio analysis: The analysis of a company using the financial ratios and comparing its trends and…

Q: What is the Importance of the Profit Ratio?

A: Profit ratio: Profit ratio is utilized to assess the corporation's capacity to make revenue as…

Q: How does the lower of cost or market relate to profit margins?

A: Answer: The lower cost or market implies that, depending on how historical costs and market costs…

Q: In general it argued that the lower of cost of market rule is supported most closely by which of the…

A: The lower of cost or market rule is related to valuing the inventory, the company should value the…

Q: What does it mean for markets to be efficient? What are the differences in the degree of efficiency,…

A: The markets are considered to be efficient if the information related to various aspects that create…

Q: Identify and explain the criticisms of using return on investment (ROI) as the onlyperformance…

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Q: How to calculate profitability analysis?

A: Sales revenue: It is the revenue earned by a business on selling the goods or providing services to…

Q: What are the benefits of Profitability Analysis?

A: Profitability analysis is a tool used by the firm to analyze cost and revenue to know whether the…

Q: Why is profitability analysis necessary, with a particular emphasis on return on investment? When…

A: Profitability is a phrase that relates to the metric used to quantify earnings. Profitability…

Q: In general, what is true of people's risk aversion for changes in income that are marginal (i.e.,…

A: Risk Aversion: It is the propensity of individuals to favor results with low vulnerability to those…

Q: Define weak form of market efficiency

A: Efficient Market Hypothesis is a hypothesis that states that the asset prices reflect all available…

Q: Given the weaknesses of cost-based pricing, why wouldany company use this method?

A: Cost-based pricing means setting prices based on the cost of goods and services.  The major…

Q: In what way can the use of ROI as a performance measure for investment centers lead to bad…

A: ROI:   It is a measure on the amount of return on a particular investment with respect to the…

Q: Why is the calculation to determine the target profit considered a variation of the break even…

A: Target Profit:   It is the desired amount of profit that a company expects to achieve by the end of…

Q: Explain to management the circumstance that would have to prevail for both marginal and absorption…

A: Marginal and absorption costing are two different approaches to dealing with fixed production…

Q: Explain how differential weight to losses and gains effect investment decisions?

A: Prospect Theory assigns differential weight to losses and gains for making investment decisions.

Q: Which of the following methods does not consider the investment’s profitability? ARR Payback NPV…

A: Average rate of return (ARR) and Internal rate of return (IRR) are methods of computing rate of…

Q: What is Profitability analysis?

A: Profitability analysis is an important measure for the business to analyze the company's ability in…

Q: Which of the following can be considered a risk in CVP analysis?

A: CVP Analysis:   CVP analysis establishes the relation between cost, volume and profit of the…

Q: Is there a point in a cost-volume-profit analysis when the company is expected to profit?

A: Is there a point in a cost-volume-profit analysis when the company is expected to profit? Answer:…

Q: What if the seller lacks sufficient information to be able to accurately estimate returns?

A: A seller may not be able to make an accurate estimate regarding returns due to multiple factors like…

Q: Explain why sunk costs are not considered in the analysis ofinvestment alternatives.

A: A sunk cost is also known as the retrospective cost, is a cost that cannot be recovered because it…

Q: Which type of market efficiency is not true? Why

A: An efficient market is one where the market price is unbiased and reflects all known information. If…

Q: Which of the following is NOT considered in cost-volume-profit analysis?

A: Answer: opportunity costs.

Q: What is the relationship between NPV and profitability index (PI)?

A: The concept of net present value is used to decide whether to invest in an investment or not. It is…

Q: What is the financial advantage (disadvantage) of further processing the intermediateproduct?

A: Further Processing means carrying the production of goods to another level and shifting its…

Q: Why short selling are risky than buying margin?

A: Short selling is riskier than buying on margin.   Short selling is borrowing shares from your broker…

Q: Which two economic concepts are fundamental to the relevance of fair values to accounting? i. The…

A: The two economic concepts are fundamental to the relevance of fair values to accounting are…

Q: In what way are profitability and efficiency related? How are profitability and liquidity related

A: The question explains about profitability and efficiency related and profitability and liquidity…

Q: profit margin

A: Profit margin = Net income * 100/Revenue

Q: Can you have a negative gross profit and if yes, explain why.

A: The gross profit margin measures how successfully a corporation produces money from direct…

Q: Give an example of a strength and a weakness of the accounting rate of return approach.

A: ARR stands for accounting rate of return, is a formula which computes the desired rate of return in…

Q: ___________ is the possible loss of revenue resulting mainly from a decline in the revenue base.…

A: There are various risks

Q: Low profit margins always imply low return on net operating assests. True OR False

A: Profit margin: Profit margin can be stated as the amount of revenue in excess of the expenditure. It…

Q: er confirmatory value?

A: Predictive value : The knowledge has predictive value, which implies it may be utilised to forecast…

Q: have led to a drop in the required rate of return?

A: Required Rate of return is the minimum rate of return which an investor expects for investing in a…