Which of the Following Ratios Helps to Evaluate How Well

question 133

Multiple Choice

Which of the following ratios helps to evaluate how well a company is earning profit with the money shareholders have invested?

• A)Asset turnover ratio
• B)Return on sales
• C)Return on assets
• D)Return on equity

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Definitions:

Automatic Stabilizers

Economic policies and programs, such as unemployment insurance and progressive taxes, designed to automatically adjust in response to economic conditions and stabilize the economy.

Business Cycle

The economic fluctuations experienced over time, characterized by periods of expansion (growth) and contraction (recession) in economic activity.

Legislative Action

The process by which a legislative body takes official steps to introduce, amend, pass, or reject laws and regulations.

Crowding-Out Effect

The phenomenon where increased government spending leads to a reduction in private sector spending, often due to higher interest rates.