The Capacity Utilization Rate Is the Ratio of

question 33

Multiple Choice

The capacity utilization rate is the ratio of

• A) production; capacity
• B) capacity; production
• C) capacity; potential GDP
• D) none of the above

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Definitions:

Return on Assets

A profitability ratio that indicates how efficiently a company uses its assets to generate profit, calculated by dividing net income by total assets.

Investing Activities

Transactions involving the purchase and sale of long-term assets and investments, which are recorded in the investing section of the cash flow statement.

Statement of Cash Flows

A financial report that provides aggregate data regarding all cash inflows a company receives from its ongoing operations and external investment sources, as well as all cash outflows that pay for business activities and investments during a given period.

Long-lived Assets

Assets that are expected to provide economic benefits over a period longer than one year, such as buildings or machinery.