To Determine How Well Her Business Is Doing, Asanda Should

question 52

Multiple Choice

To determine how well her business is doing, Asanda should monitor the return on her investment (equity) because it is a better measure of performance than:

• A)the return on assets ratio.
• B)the current ratio.
• C)the quick ratio.
• D)the absolute rand amount of income.

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Definitions:

Fixed Assets

Long-term tangible assets used in the operation of a business, not expected to be converted into cash within a year.

Land Improvements

Enhancements made to a piece of land to increase its value, such as landscaping, fencing, and installing utilities, which are usually depreciated over time.

Financial Statement

A written record that conveys the business activities and the financial performance of a company, including balance sheets, income statements, and cash flow statements.

Depreciation

The methodical distribution of the expense of a physical asset throughout its lifespan, indicating the decrease in its value as time passes.