All Other Things Held Constant, Increase in Assets Such as Receivables

question 15

True/False

All other things held constant, increase in assets such as receivables or decrease in operating income results in an increase in return on investment.

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Definitions:

Capital Intensity Ratio

A financial metric that measures the amount of capital needed per dollar of revenue generated, indicating the intensity of the capital used in the business operations.

Times Interest Earned

A financial metric assessing a company's ability to meet its interest obligations from its earnings before interest and taxes.

Interest Expense

The cost incurred by an entity for borrowed funds over a period, represented as a financial charge or fee.