Peak Performance Sporting Goods Company Has Collected the Following Information

question 304

Multiple Choice

Peak Performance Sporting Goods Company has collected the following information about itself and its competitors: Which of the following statements explains the importance of this information?

• A) Return on Sales is an indication of how well Peak Performance is competing with others in the industry in generating income from sales.
• B) Although this information is important to Peak Performance,it is an internal calculation.Investors will not compare Peak Performance's return on sales with others.There are too many other variables such as higher expenses,which may prevent Peak Performance from maintaining the lowest measure.
• C) Unlike other measurements,a firm hopes that its Return on Sales is the lowest in the industry,thus,Peak Performance is neither doing the best nor doing the worst in its industry.
• D) As a profitability measurement,return on sales is not as important to the CFO as earnings per share,because this calculation does not show a dilution of ownership.

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