Above Are Portions of the Balance Sheet and Income Statement

question 93

Multiple Choice

Above are portions of the balance sheet and income statement for two companies in 2008. Based upon this information, which of the following statements is most likely to be true?

• A)Asset turnover ratios indicate that firm A is generating greater revenue per dollar of assets than firm B.
• B)Fixed asset turnover ratios indicate that firm A generating fewer sales for the assets it employs than firm B.
• C)Both asset turnover ratios and fixed asset turnover ratios indicate that firm A is generating greater revenue per dollar of assets than firm B.
• D)Fixed asset turnover ratios indicate that firm A generating more sales for the assets it employs than firm B.

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Definitions:

Upward-sloping

Describes a curve on a graph that moves higher as it goes from left to right, often used to illustrate the relationship between price and supplied quantity in supply curves.

Short-run Supply Curve

A graphical representation showing the quantity of goods that producers are willing to supply at various prices over a short period, where at least one input is fixed.

Perfectly Competitive Market

A theoretical market structure characterized by an infinite number of small firms, homogeneous products, perfect information, and ease of entry and exit.

Demand Increases

A situation in market analysis where the quantity of a good or service that consumers are willing and able to buy rises.