Which Ratio Measures the Operating Return on the Firm's Assets

question 103

Multiple Choice

Which ratio measures the operating return on the firm's assets irrespective of financial leverage and taxes?

• A) basic earning power ratio
• B) profit margin
• C) return on assets
• D) operating leverage return

Grasp the concept of cost-effectiveness in control mechanisms.

Understand the necessity of flexibility in organizational controls.

Comprehend the importance of balancing cost versus benefit in effective control systems.

Recognize the various attributes that make controls effective.

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Definitions:

Different Performance

Fulfillment of contractual obligations in a manner that is different from what was specifically agreed upon, sometimes acceptable with mutual consent.

Original Duty

The fundamental obligation or responsibility that a party has in a contractual or legal relationship.

Enforce

To compel obedience or compliance through legal or authoritative means; to ensure the fulfillment of a requirement.

Give Consideration

In contract law, the act of offering something of value, required by both parties for a contract to be legally binding.