Which of the Following Would Best Explain a Situation Where

question 16

Multiple Choice

Which of the following would best explain a situation where the ratio of net income/total equity of a firm is higher than the industry average, while the ratio of net income/total assets is lower than the industry average?

• A)The firm's net profit margin is higher than the industry average.
• B)The firm's asset turnover is higher than the industry average.
• C)The firm's equity multiplier must be lower than the industry average.
• D)The firm's debt ratio is higher than the industry average.

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Definitions:

Account

A record or statement of financial transactions pertaining to an individual, business, or other entity.

Invoice

A document issued by a seller to a buyer that outlines the goods or services sold, their prices, and the payment terms.

Outstanding Balance

The amount of money owed that remains in a borrower's account, excluding interest and fees, that has not yet been paid.

Invoice

A document issued by a seller to a buyer, indicating items sold, prices, date of shipment, delivery and payment terms.