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Which of the Following Would Best Explain a Situation Where

question 38

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Which of the following would best explain a situation where the ratio of (net income/total equity) of a firm is higher than the industry average,while the ratio of (net income/total assets) is lower than the industry average?


Definitions:

Future Value

Future value is the value of a current asset at a specified date in the future based on an assumed rate of growth over time.

Present Value

The current worth of a future sum of money or cash flows, given a specified rate of return.

Interest Rate

The percentage of a sum of money charged for its use, indicating the cost of borrowing or the return on savings.

Present Value

The current financial value of a future financial sum or sequences of payments, assessed with a predefined rate of earnings.

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