Division Z of Stark Inc

question 34

Multiple Choice

Division Z of Stark Inc.has a rate of return on investment of 17% and a profit margin of 9%.What is its investment turnover?

• A) 4.1
• B) 2.3
• C) 1.9
• D) 3.5

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Definitions:

Debt-Equity Ratio

The ratio that evaluates the equity-versus-debt financing approach for company assets.

Return on Equity

A measure of financial performance calculated by dividing net income by shareholder's equity, indicating how well a company uses investments to generate earnings growth.

Total Debt

The sum of all owed liabilities, both current and long-term, that a company must eventually pay back.

Cash Coverage Ratio

A financial metric that measures a company's ability to cover its debt obligations with its available cash and cash equivalents.