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

Cornerstones of Financial Accounting
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ISBN:9781337690881
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Chapter7: Operating Assets
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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 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.
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