The Return on Equity Ratio Looks at How Effectively Assets

question 7

True/False

The return on equity ratio looks at how effectively assets are being utilized.

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Definitions:

Intra-entity Sales

Transactions of goods or services between divisions or units within the same legal entity.

Equity Method

A technique where an investor reflects its share of an associate's or joint venture's profits or losses in its own financial statements, affecting the carrying value of the investment.

Income Recognition

The process of reporting income when it is earned and realized or realizable, according to accounting principles.

Intra-entity Sales

Transactions occurring between two divisions or subsidiaries within the same parent company, often reflecting internal transfers of goods and services.