The Return on Net Worth Ratio Is Based on a Retailer's

question 64

Multiple Choice

The return on net worth ratio is based on a retailer's _____.

• A)net profit,fixed assets,and fixed liabilities
• B)net profit,current assets,and current liabilities
• C)net profit,net sales,total assets,and net worth
• D)net profit,total assets,net sales,and net liabilities

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Definitions:

Absorption Costing

A financial tracking approach that incorporates all costs associated with producing an item, such as direct materials, direct labor, along with all manufacturing overhead costs, whether they are fixed or variable.

Markup Percentage

The percentage added to the cost of goods to achieve a selling price, representing profit margin.

Required Return

The minimum profit or yield that investors expect to receive on an investment, considering the associated risks.

Target Costing

Target costing involves setting a planned cost for a product and then designing the product’s development cycle to meet this cost to maintain profitability.