Return on Assets Can Be a Misleading Ratio When Analyzing

question 63

Short Answer

Return on assets can be a misleading ratio when analyzing technology firms because two important assets,______________________________ and ______________________________ do not appear on their balance sheets

Calculate the increase in operating income from internal transfers and negotiate transfer prices.

Identify the most profitable divisions using various profitability metrics.

Compute minimum acceptable return on investment.

Understand and apply the concepts of controllable revenues, operating income, and calculation of ROI and its components.

---

Definitions:

Anticipatory Breach

Occurs when one party to a contract indicates they will not fulfill their contractual obligations before the due time.

Legal Position

The stance or argument taken by a party in a legal proceeding that is grounded on laws, regulations, or legal principles.

Anticipatory Breach

A situation in contract law where one party shows intent not to fulfill their contractual obligations before the due performance.

Third Party

An individual or group aside from the two primarily involved in a situation, often providing services, intervening, or affected by the actions of the main parties.