A Company Could Improve Its Return on Assets by Increasing

question 21

True/False

A company could improve its return on assets by increasing its income or by increasing its total assets.

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Definitions:

Precautionary Motive

A rationale for holding money or liquid assets to guard against future uncertainties and potential emergencies.

Recession

A significant decline in economic activity spread across the economy, lasting more than a few months, typically visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.

Cash

Physical currency such as coins and banknotes or the equivalent in bank balances that can be immediately accessible.

Book Cash

The amount of cash on hand as recorded in the financial records of a company.