The Function Described as the Profit Margin Times the Total

question 133

Multiple Choice

The function described as the profit margin times the total asset turnover times the equity multiplier is known as the:

• A) Du Pont identity.
• B) Return on assets.
• C) Statement of cash flows.
• D) Asset turnover ratio.
• E) Interval measure.

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Definitions:

Liability

The state of being legally responsible for something, especially in terms of debts or damages.

Alteration

An unauthorized change to an instrument that modifies the obligation of a party to the instrument.

Promissory Note

A written promise to pay a specified sum of money to a certain individual or entity at a specified time or on demand.

Fictitious-Payee Rule

A principle in commercial law that a bank is not liable for fraudulent endorsement payments if the drawer intended the payee to be fictitious.