The Rate of Return on Total Assets and the Rate

question 69

Multiple Choice

The rate of return on total assets and the rate of return on ordinary shareholders' equity are used to evaluate the:

• A)ability to pay current liabilities with current assets.
• B)profitability of the business.
• C)cash flow of the business.
• D)liquidity of the business.

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Definitions:

Cumulative

Relating to an amount that has been gathered or accumulated over time, often used in the context of dividends or other financial aggregates.

Preferred Stock

A type of equity security that has a higher claim on a company's assets and earnings than common stock, often paying fixed dividends.

Treasury Stock

Shares of a company's own stock that it has reacquired and held in its treasury.

Cumulative

Referring to the total amount accumulated over time, often used to describe interest, dividends, or other quantities that increase over periods.