Book chapter 8 test questions-practice

Book chapter 8 test questions-practice - Chapter 08 -...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 08 - Return on Invested Capital and Profitability Analysis Chapter 08 Return on Invested Capital and Profitability Analysis Multiple Choice Questions 1. Which of the following ratios best measures the profitability of a company? A. Return on equity B. Gross margin C. Current ratio D. Net operating asset turnover 2. Which of the following statements is correct? A. Net operating profit margin divided by net operating asset turnover equals return on net operating assets B. Return on net operating assets can be disaggregated into net operating profit margin and leverage C. Return on equity equals return on net operating assets less interest, net of tax D. Return on equity can be disaggregated into net operating profit margin, net operating asset turnover and leverage 3. Err Company has a major lawsuit against them for unsafe products. It recognizes a huge liability in 2004 of $300M. The effect of this liability is to decrease stockholders' equity by 50%. In 2005, the effect of recognizing this liability, all else equal, is:
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 4

Book chapter 8 test questions-practice - Chapter 08 -...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online