All Other Things Remaining the Same, If the Sales Revenue

question 69

Multiple Choice

All other things remaining the same, if the sales revenue increases, asset turnover ratio will

• A)Increase
• B)Decrease
• C)Stay the same
• D)may increase or decrease
• E)there is no way to tell for sure

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Definitions:

Capital Restructuring

The process of reorganizing a company's capital structure, including changing the mix between debt and equity financing.

Debt Financing

Raising capital through the sale of bonds, bills, or notes to individuals or institutional investors. In return for lending the money, the individuals or institutions become creditors and receive a promise to repay principal and interest on the debt.

Financial Risk

The possibility of losing money or the uncertainty in achieving the expected returns mainly due to market movements, interest rates, or credit failure.

ROE

Return on Equity is an indicator of a company's financial performance, indicating the amount of profit made from the shareholders' investments.