The Following Information Pertains to Cheng Company

question 173

Multiple Choice

The following information pertains to Cheng Company. Assume that all statement of financial position amounts represent both average and ending balance figures. Assume that all sales were on credit. All amounts are in thousands except per share items. What is the return on ordinary shareholders' equity for Cheng?

• A) 7.3%
• B) 16.1%
• C) 23.5%
• D) 53.3%

Understand the relationship between profitability ratios and company financial decisions.

Understand the computation and interpretation of basic financial ratios, including net profit margin percentage, debt-to-equity ratio, and price-earnings ratio.

Comprehend how financial leverage impacts company's financial sustainability and shareholder's equity.

Determine the effects of transactions on liquidity ratios such as the current ratio and the acid-test (quick) ratio.

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Definitions:

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