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:

Validity Factors

aspects that determine the accuracy and credibility of a test or research.

Predictors

Variables or indicators used to forecast or estimate future events or trends, often based on historical data or analysis.

High Validity

Indicates the degree to which a test, measure, or research accurately represents or predicts the intended outcome or concept.

Predictor Scores

Scores derived from assessments or tests that are used to forecast future performance or outcomes.