Sweet Candies Reduced Its Fixed Assets This Year Without Affecting

question 50

Multiple Choice

Sweet Candies reduced its fixed assets this year without affecting the shop's operations, sales, or equity.This reduction will increase which of the following ratios?
I.Capital intensity ratio
II.Return on assets
III.Total asset turnover
IV.Return on equity

• A)I and II only
• B)II and III only
• C)II, III, and IV only
• D)I, II, and IV only
• E)I, II, III, and IV

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Definitions:

Current Ratio

A financial metric indicating a firm's capacity to meet its immediate financial liabilities with its present assets.

Net Cash

The amount of cash available after deducting liabilities, often considered in evaluating a company's liquidity.

Equity

represents ownership interest in a company or property, often manifested as stock or shares, indicating a stake in the company's assets and profits.

Credit Purchases

Transactions where goods or services are bought using credit rather than paying with cash or check at the time of purchase.