The Rate of Return on Total Assets Will Be Greater

question 123

True/False

The rate of return on total assets will be greater than the rate of return on ordinary shareholders' equity if the company has been successful in trading on the equity at a gain.

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Definitions:

Accounts Payable Turnover

A financial ratio that measures the rate at which a company pays off its suppliers by dividing total purchases by average accounts payable for the period.

Cash Surplus

A situation where a business or individual's income exceeds its expenditures, resulting in available cash for saving or spending.

Cash Balance

The amount of cash that a company or individual has on hand at any given time.

Minimum Cash Balance

Minimum Cash Balance is the least amount of cash a company aims to hold in its register or account to meet emergency needs or unforeseen expenses.