The Following Question Relates to PQR,which Has the Following Ratios

question 38

Multiple Choice

The following question relates to PQR,which has the following ratios: return on assets, (ROA) 10 per cent;return on equity (ROE) 12 per cent;and current ratio (CR) of 1.8:1.
-A company declares and pays a final dividend.The effect of this transaction is to:

• A) decrease CR,but not affect ROA and ROE.
• B) decrease CR,but increase ROA and ROE.
• C) decrease CR,increase ROA,and not affect ROE.
• D) have no effect.

---

Definitions:

Capacity Analysis

The method of calculating the production capabilities required by a company to adapt to fluctuating needs for its products.

Time-Driven Activity-Based Costing

A refinement of activity-based costing that estimates costs based on the time required to complete specific activities involved in manufacturing a product or providing a service.

Capacity Analysis

Identifying the necessary manufacturing capacity a business must have to respond to varying product demands.

Time-Driven Activity-Based Costing

A costing methodology that assigns costs to products or services based on the actual time spent on each activity, allowing for more accurate and dynamic cost assessments.