To Measure How Effectively a Client Employs Its Assets,an Auditor

question 29

Multiple Choice

To measure how effectively a client employs its assets,an auditor calculates inventory turnover by dividing the average inventory into:

• A)Net sales.
• B)Cost of goods sold.
• C)Operating income.
• D)Gross sales.

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Definitions:

Theta

A term from options trading that describes the rate of change in an option's price with respect to the passage of time.

Elasticity

A measure of how much the demand or supply of a product changes in response to changes in price or other economic factors.

Dividend Payout

The portion of a company's earnings that is distributed to shareholders in the form of dividends, usually expressed as a percentage of the earnings.

Lower Volatility

Refers to the characteristic of an asset or portfolio to experience less fluctuation in price over time.