Vertical Equity Focuses on Measurement of the Tax Base, and Horizontal

question 74

True/False

Vertical equity focuses on measurement of the tax base, and horizontal equity focuses on the tax rate structure.

---

Definitions:

Return On Total Assets

A financial ratio that measures the net income produced by total assets during a period by comparing net income to the average total assets.

Return On Equity

A measure of financial performance calculated by dividing net income by shareholders' equity, indicating how well a company uses investments to generate earnings growth.

Net Profit Margin

A financial ratio indicating the percentage of revenue that remains as profit after all expenses are deducted.

Gross Margin

The difference between sales revenue and cost of goods sold, representing the profitability before deducting selling and administrative expenses.