Return on Equity Computations Are Used in Evaluating

question 105

Multiple Choice

Return on equity computations are used in evaluating:

• A)Liquidity.
• B)Profitability.
• C)Gross profit.
• D)Whether a ratio is improving or deteriorating over time.

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Definitions:

Long-Range Planning

The process of setting long-term goals and strategies, often extending five or more years into the future.

Annual Budget

A financial plan for a year that outlines projected income and expenditure for an organization or department.

Capital Expenditure Budget

A budget for planned expenditures on long-term assets that will provide value in the future, such as equipment or buildings.

Budgeted Balance Sheet

A financial statement that projects the balances of assets, liabilities, and equity accounts at the end of a future period based on planned activities and events.