The Ratio That Measures the Productivity of Total Assets Used

question 84

Multiple Choice

The ratio that measures the productivity of total assets used is the:

• A)rate of return on total assets.
• B)return on sales.
• C)Inventory turnover.
• D)rate of return on common stockholders' equity.

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Definitions:

Stock-Out Costs

The expenses incurred by a business when it runs out of stock on a particular item, including lost sales, customer dissatisfaction, and potential reduction in market share.

Buyer's Market

A market condition characterized by an abundance of goods available for sale, giving buyers an advantage over sellers in terms of price negotiations.

Seller's Market

A market condition characterized by a shortage of goods available, leading to sellers having an advantage over buyers in price negotiations.

Independent Demand

Refers to the need for goods or services that is determined by external market forces, not linked to the production schedules of related items.