Pose a Problem to the Class, Have Them Break Up

question 21

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Pose a problem to the class, have them break up into two or three groups and work the problem through using Figure 4.2 found on page 75.

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Definitions:

Return on Assets

A financial ratio that measures how effectively a company is using its assets to generate profit, typically expressed as a percentage.

Debt Ratio

Debt ratio is a financial ratio that measures the extent of a company’s leverage, calculated by dividing total liabilities by total assets.

Profit Margin

A financial ratio that shows the percentage of revenue that exceeds the costs of goods sold, indicating the profitability of a business.

Contra Account

An account used in the general ledger to reduce the value of a related account when the two are netted together.