When the Rate of Return on Total Assets Ratio Is

question 111

True/False

When the rate of return on total assets ratio is greater than the rate of return on common stockholders' equity ratio, the management of the company has effectively used leverage.

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Definitions:

Estimated Data

Data that has been predicted or approximated based on available information, often used for planning and forecasting purposes.

Generally Accepted Accounting Principles

A set of accounting standards and procedures that are used in the United States to govern financial reporting and accounting.

Managerial Accounting Reports

Financial reports that provide detailed and specific information to a company's management to aid in decision making, planning, and controlling activities.

Organization Chart

A diagram that shows the structure of an organization and the relationships and relative ranks of its parts and positions/jobs.