Which Ratio Measures a Firm's Performance in Using Assets to Generate

question 157

Multiple Choice

Which ratio measures a firm's performance in using assets to generate earnings independent of how the firm financed acquisition of those assets?

• A)rate of return on assets
• B)rate of return on common stockholders' equity
• C)earnings per share of common stock
• D)rate of return on preferred stockholders' equity
• E)none of the above

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Definitions:

Crop Insurance Programs

Government or private sector initiatives designed to protect farmers against losses due to natural disasters, pests, or drops in market prices.

Agricultural Risk Coverage

A form of crop insurance that pays out if the total revenue generated by all the farmers planting a given crop in a given county falls below a predetermined value.

Price Loss Coverage

A form of crop insurance that pays participating farmers if the market price of their output falls below a predetermined value.

Inelastic

Describes a situation where the demand or supply of a good is not significantly affected by changes in price.