Which of the Following Statements Is NOT True

question 125

Multiple Choice

Which of the following statements is NOT true?

• A)Companies where product costs represent a high percentage of total costs would be expected to have a low gross profit percentage.
• B)It is appropriate to compare a company's current financial ratio with the same financial ratio for (1)that company in prior years and/or (2)the ratio for the industry in which the company operates.
• C)Return on sales ratios are useful in choosing a pricing strategy for a company's products.
• D)Profitability evaluation ratios have a higher power than liquidity ratios for predicting a company's liquidity.
• E)Return on assets equals net income divided by average total assets.

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Definitions:

Maturity Date

The specified date on a financial instrument at which the principal (or nominal) amount is due to be paid back in full.

Note Receivable

A note receivable is a written promise to receive a specific amount of money, plus interest if applicable, at a future date, serving as an asset on the balance sheet.

Maturity Date

The specified date on which the final payment of a loan, bond, or other financial instrument is due to be paid.

Note Receivable

A written promise that a customer will pay a fixed amount of money with interest by a certain date.