-What Is the Turnover for Company A?
A) 25

question 82

Multiple Choice

$\begin{array}{l}\text { The following information is available on Company A: }\\\begin{array} { | l | r | } \hline \text { Sales } & \$ 900,000 \\\hline \text { Operating Income } & \$ 36,000 \\\hline \text { Shareholders' Equity } & \$ 100,000 \\\hline \text { Average Operating Assets } & \$ 180,000 \\\hline \text { Minimum Required Rate of Return } & 15 \% \\\hline\end{array}\end{array}$
-What is the turnover for Company A?

• A) 25.
• B) 5.
• C) 9.
• D) 2.

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Definitions:

Stock Price

The current price at which a share of a company is traded on the stock market.

Optimal Capital Structures

The best mix of debt, equity, and other financial instruments that minimizes the cost of capital for a company while maximizing its value.

Financial Leverage

The use of borrowed funds to increase the potential return of an investment, which also increases the risk of loss.

EPS

Earnings Per Share, a financial ratio that indicates the portion of a company's profit allocated to each outstanding share of common stock.