Asked by Jordan Ratliff on May 15, 2024
Verified
If management wishes to evaluate the ability of a business to use sales to cover the operating expenses, they could use the:
A) rate of return on total assets.
B) rate of return on common stockholders' equity.
C) gross profit rate.
D) times interest earned.
Operating Expenses
Costs associated with the day-to-day operations of a business, excluding costs directly linked to the production of goods or services.
Gross Profit Rate
A profitability ratio that indicates how well net sales cover administrative and selling expenses.
Rate of Return
The gain or loss on an investment over a specified period, expressed as a percentage of the investment's cost.
- Gain insight into the utilization and significance of profitability ratios for evaluating the financial status of a corporation.
Verified Answer
Learning Objectives
- Gain insight into the utilization and significance of profitability ratios for evaluating the financial status of a corporation.
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