Return on Assets, or ROA, can be expressed as the product of two ratios. Which two? Select one: a. Sales Turnover and Total Asset Turnover b. None of the options are correct c. Net income and total assets d. Profit margin and Total Asset Turnover e. Net Profit Margin and Fixed Asset turnover

Return on Assets, or ROA, can be expressed as the product of two ratios. Which two? Select one: a. Sales Turnover and Total Asset Turnover b. None of the options are correct c. Net income and total assets d. Profit margin and Total Asset Turnover e. Net Profit Margin and Fixed Asset turnover

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter13: Financial Statement Analysis

Section: Chapter Questions

Problem 13.15E

See similar textbooks

Related questions

Q: Which of the following is needed to calculate a firm’s WACC? A. the cost of carrying inventory…

A: The weighted average cost of capital (WACC) expresses the expected return on capital provided to an…

Q: Firm AAA has no debt. Existing assets generate earnings of $20mil. per year forever. Discount…

A: Given the following: Existing Earnings = $20,000,000 Discount rate = 10% No. of outstanding shares =…

Q: Assume that today is December 31, 2019, and that the following information applies to Abner…

A: In this question one has to find the present value of the stock. Corporation value model starts with…

Q: (a) at a rate of 3% p.a. effective, for 20 years. Compute the present value of an annuity due that…

A: Note: Since you have posted multiple questions, we will provide the solution only to the first…

Q: Redan, Inc., is expected to maintain a constant 5.75 percent growth rate in its dividends,…

A: The required rate of return on company stock is the minimum return that is required by investor for…

Q: Cindy buys a stock on January 1 for $25. It pays a total dividend of $1 during the first year, and…

A: Holding period return (HPR) is the total return received from holding an investment over a specific…

Q: AAA Corporation and BBB Corporation are identical in every way except their capital structures. AAA…

A: A company's average after-tax cost of capital from all sources, including common stock, preferred…

Q: CHAUZWRtZW50dW0uY29tL2xlYXJuZXItdWkvc2VJb25kYXJ5L3VzZXItY... ☆ Unit Activity: Mathematical Models…

A: Any sum infused into get returns or create wealth is recognized as an investment. The funds can be…

Q: Company A has a beta of 0.70, while Company B's beta is 1.20. The required return on the stock…

A: A Beta = 0.70 B Beta = 0.95 Required return on market = 11% Risk free rate = 4.25%

Q: ABC Company is trying to decide whether or not to automate their product packing process. The…

A: At year 0, cash outflow = 200000 From year 1 to 10, net inflows = 50000 - 9000 = 41000 At year 10,…

Q: What is the expected market return if the expected return on STC is 20 percent, its beta is 1.5, and…

A: The Capital Asset Pricing Model (CAPM) is a financial model that helps investors understand the…

Q: A credit card has a $910 balance and a 19.19% annual percentage rate. The minimum required monthly…

A: We will use formula of Outstanding Loan balance to know the balance left after 41 payments :…

Q: McGilla Golf has decided to sell a new line of golf clubs. The clubs will sell for $920 per set and…

A: Capital budgeting techniques are used to evaluate potential long-term investments in projects or…

Q: 2. Answer all parts of this question. (a) Consider the returns of two shares, A and B, under three…

A: 1. Expected Return. ER = ∑ Ri *Pi where , ER = Expected Return Ri = Return of stock for i th…

Q: A perpetuity makes its first annual payment of $110 exactly 17 years from today. The discount rate…

A: Perpetuity refers to a series of payments to be received for an indefinite period. Perpetuity pays a…

Q: The additional compensation that investors require to take on higher risk investments is the a.…

A: The risk associated with an investment refers to the probability of loss that an investor bears when…

Q: Given the following information, determine the beta coefficient for Stock L that is consistent with…

A: Risk free rate 5.5% Market rate 10.5%

Q: Scenario 2: You need a $12,000 loan to buy a good used car. Your bank offers a 3-year loan with an…

A: Monthly payment refers to an amount that is paid every month until the loan period including…

Q: The Berry Corporation is considering a change in its cash-only policy. The new terms would be net…

A: NPV is the dollar return of the change in credit policy. If the NPV is positive that means the…

Q: 8) The yield on a corporate bond with a 20 year maturity would include A) the real rate of interest,…

A: The Yield on a corporate bond is the rate of return an investor would receive if they hold the bond…

Q: Stocks have a reasonable chance of keeping pace with inflation‚Äîbut when it comes to doing so, not…

A: The stock are the security which gives your holders the benefit of ownership and help them to on…

Q: A pension fund manager decides to invest a total of at most $30 million in U.S. Treasury bonds…

A: Total amount of investment =$30 million Treasury bond's annual interest=4% Mutual fund's annual…

Q: For a DCF valuation, you find that the present value of FCFs is $100,000, and the present value of…

A: Intrinsic value is a measure of an asset's inherent worth, independent of its market value. It is…

Q: Suppose an 8 percent coupon, 30-year maturity bond sells for $1,150 and is callable in 10 years at a…

A: Yield-to-Call(YTC) refers to returns generated from a bond by the bondholder until the call date of…

Q: Use the unpaid balance method to find the finance charge on the credit card account for August. The…

A: The unpaid balance for the month is the sum of the previous months' balance and any purchases made…

Q: is

A: A country that has an inflation rate lower than other countries, results in less cost of production…

Q: Troy Juth wants to purchase new dive equipment for Underwater Connection, his retail store in…

A: When the lender lends a loan to the borrower, he charges a rate of interest on the borrowed amount.…

Q: Compute the price of the European call option using the R program introduced in class where K = 100,…

A: A European option is the type of options that limits the exercise of the options until the…

Q: Monica Fuentes purchased a new video editing equipment costing $12,000, including taxes and delivery…

A: When the lender lends a loan to the borrower, he charges a rate of interest after considering the…

Q: You bought a $1,000 face value Suffolk County, NY 10-year bond with equal annual amortization. A)…

A: To the bond holder up to the bond's maturity date, interest is paid in the form of coupons.…

Q: create a cash flow sheet Initial investment 60,000 resources expense : 5,000 labour cost: 10,000…

A: A Cash Flow Statement Is a financial statement showing cash inflows and outflows of business…

Q: Avicorp has a $14.3 million debt issue outstanding, with a 5.9% coupon rate. The debt has…

A: A bond is a kind of debt security issued by the government and private companies for raising funds…

Q: Given the following information, calculate the weighted average cost of capital for Puppet…

A: The Weighted average cost of capital (WACC) refers to the overall cost of capital to discount a…

Q: 7. A person borrows $5,000 at an annual interest rate of 18%, compounded monthly. Monthly payments…

A: The concept of time value of money will be used and applied here. A person, when he or she borrows…

Q: IMPROVING PROFITABILITY Entrepreneurial flair and financial rigor are much about attitude as skill.…

A: Entrepreneurial flair and financial rigor are both essential to ensure commercial success. In order…

Q: Given the following information, determine the beta coefficient for Stock L that is consistent with…

A: According to capital asset pricing model Expected return on stock = Risk free rate+Beta×Market…

Q: Suppose First National Bank has $500 million of assets and $ $75 million of equity capital. If First…

A: Assets =$ 500 Million, Equity = $ 75 Million ROA = 5% Hence, ROA = Return Assets 5%= Return $500…

Q: The State of Chiapas, Mexico, decided to fund a program for literacy. The first cost is $200,000…

A: Initial cost = $200,000 Budget = $100,000 Time = t = 7 years Interest rate = r = 10%

Q: What is the best strategy for a RDN to use to benchmark financial performance, both internally and…

A: Benchmarking financial performance is an essential component of managing any non-profit program,…

Q: rest dollar and round IRR percentages to one decimal place (for example, 15.68% rounds to 15.7% and…

A: The Net present value is calculation that is involved in the decision making of project with…

Q: The management of Stillford Micro Brew is considering the purchase of an automated bottling machine…

A: In a typical capital budgeting replacement project, the simple rate of return is required. For the…

Q: NPV and EVA A project cost $2.9 million up front and will generate cash flows in perpetuity of…

A: The Net present value is by using the present value of cash inflow and cash outflow are compare…

Q: Mr Eugene holds a five-year, 10%, ksh100, 000 bond. Determine the value of this bond if the cost of…

A: Value of bond will be calculated using formula :

Q: Following the calculation for years 1 and 2, what would be the payment adjustments and loan balances…

A: In this question, the monthly payment cannot exceed 5% of the previous year's monthly payment. The…

Q: We consider a market with N risky assets. The following table shows the information of some…

A: The portfolio variance is calculated as shown below. Portfolio…

Q: Partial payments are made on the dates indicated. Use the United States rule to determine the…

A: An amount borrowed is partly compensated by two intermittent payments. The balance to be paid on the…

Q: Next year, Exxon Mobil will pay a dividend of $3.41 per share. Historically, Exxon Mobil's dividends…

A: Issue of shares is one of important source of finance for the business. Fair value of share is being…

Q: If $2500 is invested into an account that pays 4.35% interest compounded continuously, how long will…

A: The concept that implies that any sum of money is currently worth more as compared to the same…

Q: A bond pays a coupon rate of 8%, has 5 years to maturity and a yield to maturity of 8%. What is the…

A: Macaulay duration is weighted average duration of bond considering the cash flow from bond. It…

Q: 1 Building a turbine farm years over 10 2 year construction, 8 years operation Construction is…

A: Free cash flow to the equity needs to be estimated year-wise and then the equity value needs to be…

Question

Return on Assets, or ROA, can be expressed as the product of two ratios. Which two?

Select one:

Sales Turnover and Total Asset Turnover

None of the options are correct

Net income and total assets

Profit margin and Total Asset Turnover

Net Profit Margin and Fixed Asset turnover

Video Video

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Introduction

VIEW

Step 2: Explanation

VIEW

Solution

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Similar questions

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.
Define each of the following terms: Liquidity ratios: current ratio; quick, or acid test, ratio Asset management ratios: inventory turnover ratio; days sales outstanding (DSO); fixed assets turnover ratio; total assets turnover ratio Financial leverage ratios: debt ratio; times-interest-earned (TIE) ratio; EBITDA coverage ratio Profitability ratios: profit margin on sales; basic earning power (BEP) ratio; return on total assets (ROA); return on common equity (ROE) Market value ratios: price/earnings (P/E) ratio; price/cash flow ratio; market/book (M/B) ratio; book value per share Trend analysis; comparative ratio analysis; benchmarking DuPont equation; window dressing; seasonal effects on ratios
Profitability ratios include all of the following EXCEPT a.current ratio. b.asset turnover. c.return on total assets. d.price-earnings ratio.
In a DuPont analysis, what are the components of return on assets?a. Net Profit Margin Ratio and Debt Ratiob. Net Profit Margin Ratio and Leverage Ratioc. Net Profit Margin Ratio and Asset Turnover Ratiod. Asset Turnover Ratio and Leverage Ratio
Which of the following is NOT one of the ratios in Profitability group? Select one: a. Quick ratio b. Gross profit margin c. Return on Assets d. Operating profit margin
Indicate the effect of the transactions listed in the following table on total current assets, current ration, and net income. Use (+) to indicate an increase, (-) to indicate a decrease, and (0) to indicate either no effect or an indeterminate effect. Be prepared to state any necessary assumptions and assume an initial current ratio of more than 1.0. A fixed asset is sold for less than book value.
Indicate the effect of the transactions listed in the following table on total current assets, current ration, and net income. Use (+) to indicate an increase, (-) to indicate a decrease, and (0) to indicate either no effect or an indeterminate effect. Be prepared to state any necessary assumptions and assume an initial current ratio of more than 1.0. A fixed asset is sold for more than book value.
Which of the following is not an asset utilization ratio? Group of answer choices... a. Return on assets b. Average collection period c. Fixed asset turnover d.Inventory turnover
Which of the following ratios measures short-term solvency? a. Current ratio b. Creditors' equity to total assets c. Return on investment d. Total asset turnover
The return on assets ratio is a: Group of answer choices A)Liquidity ratio. b)Solvency ratio. C)Profitability ratio. D)Market indicator ratio. e)None of the above
A decrease in Selling and Administrative Expenses woulddirectly impact what ratio?a. Fixed asset turnover ratio. c. Current ratio.b. Times interest earned. d. Gross profit percentage.
Under the Dupont Technique, which of the following is false? a. Dupont Technique reveals the factors that determines the firm’s return on asset. b. Asset management, as represented by the ratio of net sales and average equity, is one of the factors that is considered in deriving the return on assets. c. The Company’s assessment of asset utilization and profitability can be determined by the Dupont Technique. d.The return on asset is the computed by multiplying the return on sales and the asset turnover.