Unrelated Diversification Has Been the Norm for the Most Successful

question 59

True/False

Unrelated diversification has been the norm for the most successful firms in many industrialized countries such as Germany, Italy, and France.

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Definitions:

Return-On-Sales Ratio

A profitability metric that calculates the efficiency of a company in converting sales into profits, indicating how much of each dollar of sales is translated into profit.

ROE

Return on Equity, a measure of financial performance calculated by dividing net income by shareholders' equity, indicating how effectively management is using a company’s assets to create profits.

P/E Ratio

The price-to-earnings ratio, a valuation measure comparing the current share price of a company to its per-share earnings.

Asset Turnover Ratio

A financial metric that measures the efficiency of a company's utilization of its assets to generate sales or revenue.