Return on equity using the traditional DuPont formula equals:
A. (net profit margin)(interest component)(solvency ratio).
B. (net profit margin)(total asset turnover)(tax retention rate).
C. (net profit margin)(total asset turnover)(financial leverage multiplier).
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To study trends in a firms cost of goods sold (COGS), the analyst should standardize the cost of goods sold numbers to a common-sized basis by dividing COGS by:
A. assets.
B. sales.
C. Net income.
Which of the following is least likely a change in cash flow from operations under U.S. GAAP?
A decrease in notes payable.
B. An increase in interest expense.
C. An increase in accounts payable.
Which of the following is most likely an essential characteristic of an asset?
An asset is tangible.
B. An asset is obtained at a cost.
C. An asset provides future benefits.
Which principle requires that cost of goods sold is recognized in the same period in which the sale of the related inventory is recorded?
A. Going concern.
B. Certainty.
C. Matching.