If a Company's ROA Is High, Then an Investor Can

question 19

Multiple Choice

If a company's ROA is high, then an investor can assume that the company

• A) is in danger of defaulting on its loans.
• B) has more equity than debt in its capital structure.
• C) is profitable.
• D) pays a high dividend.

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Definitions:

Weekly Wage

The total amount of money paid to an employee on a weekly basis for services rendered.

Accounts Receivable

Money that a business is due to receive from its customers for products or services already supplied but not paid for.

Salaries Expense

The overall cost incurred by a company to pay its employees, typically recorded as an operational expense.

Service Revenue

Income earned by a company through the provision of services to customers.