Indicate Whether Each of the Following Statements About Financial Statement

question 30

Short Answer

Indicate whether each of the following statements about financial statement analysis is true or false.
_____ a)The asset turnover ratio is calculated by dividing net income by average total assets.
_____ b)The asset turnover ratio is likely to be high in an industry in which operations require only a minimal investment in assets.
_____ c)Return on equity measures the wealth generated by the amount of assets invested in a business.
_____ d)A higher value for the return on investment ratio would generally indicate more effective company management.
_____ e)The use of financial leverage often causes a business's return on equity to be higher than its return on investment.

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Definitions:

Job Specialization

The process of focusing one's occupational capacity on a specific area of expertise, leading to increased efficiency and skill in that area.

Hygiene Factor

Elements of the work environment that, according to Herzberg's two-factor theory, prevent job dissatisfaction but do not necessarily enhance job satisfaction, such as salary and working conditions.

Job Security

The chance or likelihood of a person maintaining their employment without facing the possibility of losing their job.

Autonomy

The degree of independence and self-direction that an individual or entity possesses.