A Firm Has a Debt-To-Total Assets Ratio of 60%, $300,000

question 107

Multiple Choice

A firm has a debt-to-total assets ratio of 60%, $300,000 in debt, and a net income of $50,000. Calculate return on equity.

• A) 40%
• B) 20%
• C) 25%
• D) There is not enough information to calculate return on equity.

Recognize the impact of business size on the obligation to offer family leave, medical leave, or health insurance.

Identify the tax implications of different business structures.

Learn the principles and limitations of the Fair Use doctrine.

Understand the requirement of an Employer Identification Number (EIN) for hiring employees.

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Definitions:

Segmented Income Statements

Financial reports that show income, expenses, and profitability for different parts of an organization, such as departments or products.

Common Fixed Costs

Costs that remain unchanged in total for a given time period, despite variations in activity level.

Variable Costing

An accounting method that includes only variable costs—costs that change with production level—in product costs, excluding fixed manufacturing overhead.

Absorption Costing

An accounting method that includes all direct and indirect manufacturing costs in the cost of a product.