When the Return on Total Assets Is Greater Than the Return

question 49

True/False

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

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Definitions:

Accounts Receivable Turnover

A financial metric that measures how frequently a company collects its average accounts receivable over a period, indicating the efficiency of credit policies.

Accounts Receivable Turnover

A financial ratio that measures how efficiently a company collects debt from its customers over a period.

Financial Data

Financial data encompasses information on a company's financial performance, including income statements, balance sheets, cash flow statements, and ratios, used for analysis and decision-making.

Year

A period of approximately 365 days used for calculating time in most of the world, divided into 12 months.