Walton Company's Return on Sales for the Most Recent Year

question 123

Multiple Choice

Walton Company's return on sales for the most recent year was 5%. The industry leader reports a return on sales of 7%. The comparison of each company's return on sales is an example of:

• A) benchmarking.
• B) gross margin analysis.
• C) detail analysis.
• D) intercompany analysis.

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Definitions:

Perpetual Inventory System

An inventory accounting system that records the sale or purchase of inventory immediately through the use of computerized point-of-sale systems and enterprise asset management software.

Net Price Method

A pricing strategy taking into account all available discounts and rebates to determine the final purchase price.

Purchase Discounts Taken

Reductions in the purchase price of goods or services, realized for paying early or within a specified period.

Credit Terms

The conditions under which credit will be extended to a customer, including the repayment time frame and any interest or fees that apply.