Ratios That Measure How Efficiently a Firm's Management Uses Its

question 12

Multiple Choice

Ratios that measure how efficiently a firm's management uses its assets and equity to generate bottom line net income are known as ________ ratios.

• A)asset management
• B)long-term solvency
• C)short-term solvency
• D)profitability
• E)market value

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Definitions:

Sarbanes-Oxley Act

A U.S. law enacted in 2002 aimed at protecting investors from fraudulent accounting activities by corporations, thereupon enhancing corporate governance and financial transparency.

Investor Confidence

The level of trust that investors have in the stability and potential profitability of financial markets or specific investments.

Corporate Scandals

Major failures of ethics and governance within corporations, often leading to legal penalties or public outrage.