What Is Primarily Responsible for the Potential Distortion Among the ROA

question 91

Multiple Choice

What is primarily responsible for the potential distortion among the ROA of different firms when net income is used in the numerator of ROA?

• A) Firms have different dividend payout ratios.
• B) Some firms use fully depreciated assets.
• C) Financial leverage varies among firms.
• D) Unprofitable firms will not have any tax liability.

---

Definitions:

Environmental Force

External factors, such as social, economic, technological, competitive, and regulatory conditions, that influence an organization’s operations and outcomes.

Personalized Marketing

A marketing strategy where promotional messages are tailored to individual consumers based on their preferences and behaviors.

Visual Search

The ability to search for information on the internet or within an application using images instead of text.

Artificial Intelligence

The capability of a computer or machine to imitate intelligent human behavior, including learning, reasoning, and problem-solving.