Uniox,IncIntends to Increase Its Profits by 50% in the Next

question 75

Multiple Choice

Uniox,Inc.intends to increase its profits by 50% in the next fiscal year.Which of the following is most likely to be a lag indicator in Uniox's performance report?

• A) return on investment
• B) number of repeat customers
• C) rate of on-time deliveries
• D) defect rate

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Definitions:

Partial Equity Method

An accounting method used by companies to record their investments in other companies when they can exert significant influence but do not have full control.

Goodwill

An intangible asset that arises when a business is purchased for more than the fair value of its tangible and identifiable intangible assets.

Partial Equity Method

An accounting technique used when an investing company does not have significant influence over the investee but still wants to record its investment's profit and loss proportionately.

Equity Method

An accounting technique used to record investments in associate companies where the investor has significant influence, typically reflected by owning 20%-50% of voting stock.