Which of the Following Statements Is Most Correct

question 72

Multiple Choice

Which of the following statements is most correct?

• A) An increase in a firm's debt ratio, with no changes in its sales and operating costs, could be expected to lower its profit margin on sales.
• B) An increase in the DSO, other things held constant, would generally lead to an increase in the total asset turnover ratio.
• C) An increase in the DSO, other things held constant, would generally lead to an increase in the ROE.
• D) In a competitive economy, where all firms earn similar returns on equity, one would expect to find lower profit margins for airlines, which require a lot of fixed assets relative to sales, than for fresh fish markets.
• E) It is more important to adjust the Debt/Assets ratio than the inventory turnover ratio to account for seasonal fluctuations.

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Definitions:

Procedural Justice

The fairness of the processes that lead to outcomes or decisions, particularly in the context of legal or organizational settings.

Distributive Justice

A principle concerned with the fair allocation of resources and benefits among members of a society or an organization.

Performance

The level of achievement or output that an employee demonstrates in their job duties over a certain period.

Bias

A predisposition or prejudice towards or against something or someone, often in a way considered to be unfair.