Which of the Following Focuses on the Ability of a Company

question 28

Multiple Choice

Which of the following focuses on the ability of a company to earn profits?

• A) The return on total assets
• B) The inventory turnover
• C) The quick ratio
• D) The fixed charge coverage ratio

---

Definitions:

Proper Purpose

Acting with a legitimate objective, especially in the context of corporate governance where actions should align with the best interests of the company and its shareholders.

Shareholders

Individuals or entities that own shares in a corporation, making them part owners of the company with certain rights and responsibilities.

Proxy

A person authorized to act on behalf of another, especially in voting at a meeting or in corporate matters.

Agency

A relationship where one party (the agent) is authorized to act for another (the principal) in dealings with third parties.