Asked by Christina Rodrigue on Jun 17, 2024
Verified
A firm has a lower inventory turnover, a longer ACP, and a lower fixed-asset turnover than the industry averages. You should not be surprised to find that this firm has:
I. Lower ATO than the industry average
II. Lower ROA than the industry average
III. Lower ROE than the industry average
A) I only
B) I and II only
C) II and III only
D) I, II, and III
Inventory Turnover
A financial metric indicating how many times a company has sold and replaced inventory over a given period.
Fixed-Asset Turnover
A financial ratio that measures a company's ability to generate sales from its fixed assets.
ROA
Return on Assets; a financial ratio indicating how profitable a company is relative to its total assets.
- Analyze a corporation's asset and fixed-asset turnover ratios to assess its operational prowess.
- Appraise a firm's operational success by analyzing and computing financial ratios.
- Assess the repercussions of financial and operational leverage on a corporation's return on equity.
Verified Answer
Learning Objectives
- Analyze a corporation's asset and fixed-asset turnover ratios to assess its operational prowess.
- Appraise a firm's operational success by analyzing and computing financial ratios.
- Assess the repercussions of financial and operational leverage on a corporation's return on equity.
Related questions
The Financial Statements of Burnaby Mountain Trading Company Are Shown ...
The Financial Statements of Burnaby Mountain Trading Company Are Shown ...
A Firm Has an ROA of 19%, a Debt/equity Ratio ...
If a Firm's Ratio of Stockholders' Equity/total Assets Is Lower ...
The Most Effective Methods of Directly Evaluating the Financial Performance ...