Herman and Henry Are Equal Partners in Badger Enterprises,a Calendar

question 53

True/False

Herman and Henry are equal partners in Badger Enterprises,a calendar year partnership.During the year,Badger Enterprises had $305,000 gross income and $230,000 operating expenses.Badger distributed $20,000 to each of the partners. Herman and Henry each must report $37,500 of income from the partnership.

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Definitions:

Return On Assets

Return on assets (ROA) is a profitability ratio that measures how efficiently a company can manage its assets to produce profits during a period, calculated by dividing net income by total assets.

Financial Leverage

The use of borrowed funds (debt) to amplify returns from an investment or project.

Fixed Asset Turnover Ratio

A performance metric that evaluates how efficiently a firm uses its fixed assets to generate sales.

Total Asset Turnover Ratio

A financial ratio that measures the efficiency of a company's use of its assets to generate sales revenue.