Indicate Whether Each of the Following Statements About Financial Statement

question 13

Short Answer

Indicate whether each of the following statements about financial statement analysis is true or false.
The ratio of plant assets to long-term liabilities is a measure of a company's ability to obtain additional long-term financing.______
Generally,a company's current assets should be purchased using long-term financing such as bonds payable.______
Ratios that measure a company's profitability provide some measure of the effectiveness of the company's management.______
Net margin indicates the amount remaining from each sales dollar after cost of goods sold has been subtracted out.______
Net margin is also sometimes called the return on assets ratio.______

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Definitions:

Average Total Cost

The total cost of production (fixed plus variable costs) divided by the total quantity of output.

Market Output

The aggregate amount of products and services created and available for purchase within a market.

Merging of Firms

The process where two or more separate entities come together to form a single, combined organization, typically to achieve economic efficiencies or market advantages.

Identical Product

A product that is exactly the same in every detail and attribute as another, making them indistinguishable from each other.