Which of the Following Measures How Effectively the Company Uses

question 21

Multiple Choice

Which of the following measures how effectively the company uses its capital to generate revenues and is calculated by taking revenues and dividing it by invested capital?

• A) Return on invested capital
• B) Return on sales
• C) Capital turnover
• D) Cost of goods sold
• E) Sales, general, and administrative expenses

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Definitions:

Real Assets

Assets that have physical form or are tangible, such as real estate, commodities, or natural resources, as opposed to financial assets like stocks or bonds.

Wealth Distribution

The manner in which wealth is shared among individuals in a society, often analyzed for its levels of equality or inequality.

Coincidence of Wants

A situation in a barter economy where two parties each possess goods or services that the other wants, facilitating a direct exchange without the need for money.

Barter

The direct exchange of one good or service for another good or service.