Which two ratios are used in the Du Pont system to create return on assets?
A. Return on assets and asset turnover
B. Profit margin and asset turnover
C. Return on total capital and profit margin
D. Inventory turnover and return on fixed assets
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The Bubba Corp. had earnings before taxes of $400,000 and sales of $2,000,000. If it is in the 40% tax bracket, its after-tax profit margin is
A. 40%
B. 12%
C. 20%
D. 25%
A firm has a debt-to-equity ratio of 40%, a debt of $250,000, and a net income of $100,000. The return on equity is
A. 60%
B. 16%
C. 30%
D. There's not enough information to determine the return on equity
For a given level of profitability as measured by profit margin, the firm's return on equity will
A. increase as its debt-to-assets ratio decreases.
B. decrease as its current ratio increases.
C. increase as its debt-to-assets ratio increases.
D. decrease as its times-interest-earned ratio decreases.
If XYZ’s receivables turnover is 4x, what does that mean?
A. XYZ’s total sales are rotated four times a year.
B. XYZ has a really good receivables turnover rate.
C. XYZ is able to collect its receivables every 90 days, or 4 times a year.
D. XYZ generates four times as much sales through receivables than sales through cash.