When Considering the Difference Between Return on Net Operating Assets

question 73

Multiple Choice

When considering the difference between return on net operating assets (RNOA) and return on common shareholders' equity (ROCE) , which of the following statements is incorrect?

• A)Preferred dividends are deducted from the numerator when calculating ROCE but not when calculating RNOA.
• B)RNOA is a pre-interest measure but ROCE is not.
• C)RNOA is a post-interest measure but ROCE is not.
• D)RNOA is independent of the form of financing but ROCE is not.

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Definitions:

Lean Operations

A management philosophy aimed at minimizing waste within manufacturing systems while simultaneously maximizing productivity.

Toyota Production System

A highly efficient and flexible production system developed by Toyota that focuses on eliminating waste and increasing quality.

TPS

Toyota Production System, a highly influential production philosophy focused on eliminating waste, improving productivity, and achieving efficiency in manufacturing.

Kanban Size

Refers to the capacity or limit set for a kanban, a tool in lean manufacturing and just-in-time production, which signals when more materials or work is needed.