If Brewster's Produces a Return on Assets of 14 Percent

question 55

Multiple Choice

If Brewster's produces a return on assets of 14 percent and also a return on equity of 14 percent,then the firm

• A)has no net working capital.
• B)is using its assets as efficiently as possible.
• C)has no debt of any kind.
• D)also has a current ratio of 14.
• E)has an equity multiplier of 1.4.

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Definitions:

Profit (Loss)

The financial result that occurs when revenues exceed expenses (profit) or expenses exceed revenues (loss).

Management Report

Internal documents prepared by a company's management containing detailed financial and operational information.

Financial Statements

Written reports that quantitatively describe the financial health of a company, including the balance sheet, income statement, and cash flow statement.