Toronto Skaters Company Earned a Net Profit Margin of 6

question 39

Multiple Choice

Toronto Skaters Company earned a net profit margin of 6% in 2015.Their turnover ratio is 5 and the firm had a leverage ratio of 3.The return on equity earned by Toronto Skaters in 2015 is:

• A) 0.90%
• B) 9%
• C) 10%
• D) 90%

---

Definitions:

Operating Lease

A leasing arrangement that allows for the use of an asset without transferring ownership rights, typically treated as an operating expense in financial statements.

Long-Term Asset

An asset that is expected to provide economic benefits to a business for more than one fiscal year, such as property, plant, and equipment.

Revenue Expenditure

A type of expenditure that does not result in the acquisition of long-term assets and is rather incurred in the day-to-day operations of a business.

New Equipment

Recently acquired or installed machinery or tools intended for operational or productive use in an organization.