One Important Difference Between Return on Assets (ROA)and Return on Common

question 21

Multiple Choice

One important difference between return on assets (ROA) and return on common shareholder's equity (ROCE) is

• A) ROA does not differentiate based on how a company finances its assets; ROCE does.
• B) ROA does not distinguish between the different types of income items, such as income from continuing operations, discontinued operations, extraordinary items and changes in accounting principles; ROCE does.
• C) ROCE does not distinguish between the different types of income items, such as income from continuing operations, discontinued operations, extraordinary items and changes in accounting principles; ROA does.
• D) ROCE does not differentiate based on how a company finances its assets; ROA does.

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Definitions:

Present Intent

The current intention or determination of an individual to perform a particular act or to act in a particular manner.

Offeree

The person or party to whom an offer is made in a contract negotiation.

Offeror

The party in a contract negotiation that presents a proposal or offer to enter into an agreement with another party, known as the offeree.

Premium-Grade

Describes products or materials of superior quality that exceed the standard specifications.