Select the Correct Statement from the Following

question 153

Multiple Choice

Select the correct statement from the following:

• A) Profit margin reflects a company's ability to produce net sales from total assets.
• B) Total asset turnover reflects the percent of net income in each dollar of net sales.
• C) Return on total assets can be separated into gross margin ratio and price-earnings ratio.
• D) High returns on total assets are desirable.
• E) Return on total assets analysis is beneficial in evaluating a company but is not useful for competitor analysis.

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Definitions:

Midpoint Method

A technique used to calculate elasticity by taking the average of the starting and ending prices and quantities to determine percentage changes.

Income Elasticity of Demand

An indicator of the variability in a product's demand based on shifts in consumer income.

Price Elasticity of Supply

An indicator of the sensitivity of the amount of a product supplied to fluctuations in its price.

Price Elasticity of Supply

A measure of how much the quantity supplied of a good responds to a change in the price of that good, indicating the producers' ability to adjust supply when prices change.