The Rate of Return on Total Assets and the Rate

question 147

Multiple Choice

The rate of return on total assets and the rate of return on common stockholders' equity are used to evaluate the:

• A) profitability of the business.
• B) liquidity of the business.
• C) ability to pay current liabilities with current assets.
• D) cash flow of the business.

---

Definitions:

Budgeted Purchases

The estimated amount of goods or materials a company plans to buy over a certain period, often part of the budgeting process.

Units Manufactured

The total number of units produced by a company in a specific period, reflecting the company's production volume.

Year

refers to a period of twelve months used for financial, business, and calendar purposes.

Ending Inventory

Ending inventory refers to the total value or quantity of unsold goods that a company holds at the end of an accounting period.