Which of the following is not true? Firm A Firm B Industry Benchmark 2018 2019 2020 2018 2019 2020 2018 2019 2020 ROA 9.14% 9.50% 9.90% 8.11% 8.16% 8.19% 8.11% 8.14% 8.15% ROE 22.45% 22.95% 23.45% 19.65% 19.88% 20.12% 19.95% 20.55% 21.00% TIE 1.75 1.65 1.55 2.75 2.90 3.05 2.25 2.30 2.50 CR 3.25 3.66 3.75 2.55 2.65 2.75 2.40 1.45 2.50 EPS 1.90 2.10 2.25 1.55 1.65 1.75 1.52 1.55 1.60 A Based on ROA, Firm A is doing better than Firm B and the Industry benchmark. B Based on Times Interest Earned, Firm A is doing better than Firm B and the Industry benchmark. C Based on ROE, Firm A is doing better than Firm B and the Industry benchmark. D Based on current ratio, Firm B is doing better than the Industry benchmark.

Which of the following is not true? Firm A Firm B Industry Benchmark 2018 2019 2020 2018 2019 2020 2018 2019 2020 ROA 9.14% 9.50% 9.90% 8.11% 8.16% 8.19% 8.11% 8.14% 8.15% ROE 22.45% 22.95% 23.45% 19.65% 19.88% 20.12% 19.95% 20.55% 21.00% TIE 1.75 1.65 1.55 2.75 2.90 3.05 2.25 2.30 2.50 CR 3.25 3.66 3.75 2.55 2.65 2.75 2.40 1.45 2.50 EPS 1.90 2.10 2.25 1.55 1.65 1.75 1.52 1.55 1.60 A Based on ROA, Firm A is doing better than Firm B and the Industry benchmark. B Based on Times Interest Earned, Firm A is doing better than Firm B and the Industry benchmark. C Based on ROE, Firm A is doing better than Firm B and the Industry benchmark. D Based on current ratio, Firm B is doing better than the Industry benchmark.

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter13: Emerging Topics In Managerial Accounting

Section: Chapter Questions

Problem 7MCQ

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Which of the following is not true?

	Firm A Firm B Industry Benchmark
	2018	2019	2020	2018	2019	2020	2018	2019	2020
ROA	9.14%	9.50%	9.90%	8.11%	8.16%	8.19%	8.11%	8.14%	8.15%
ROE	22.45%	22.95%	23.45%	19.65%	19.88%	20.12%	19.95%	20.55%	21.00%
TIE	1.75	1.65	1.55	2.75	2.90	3.05	2.25	2.30	2.50
CR	3.25	3.66	3.75	2.55	2.65	2.75	2.40	1.45	2.50
EPS	1.90	2.10	2.25	1.55	1.65	1.75	1.52	1.55	1.60

	A	Based on ROA, Firm A is doing better than Firm B and the Industry benchmark.
	B	Based on Times Interest Earned, Firm A is doing better than Firm B and the Industry benchmark.
	C	Based on ROE, Firm A is doing better than Firm B and the Industry benchmark.
	D	Based on current ratio, Firm B is doing better than the Industry benchmark.