Which of the Following Ratios Does Not Use Net Income

question 124

Multiple Choice

Which of the following ratios does not use net income in its calculation?

• A)Net profit margin
• B)Earnings per share
• C)Return on equity
• D)Fixed asset turnover

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Definitions:

Processing Departments

Divisions or areas within a factory where specific stages of production are completed, often part of a cost accounting system to track expenses and efficiency.

Job Order Costing

An accounting methodology used to allocate costs to specific jobs or batches, allowing for detailed cost tracking of particular projects.

Finished Goods Account

An account used to track the value of products that are completed and ready for sale.

Factory Overhead Ledger

An accounting ledger that details the indirect costs associated with manufacturing, which may include utilities, depreciation, and salaries of non-direct labor.