The Net Profit to Equity Ratio (Or the Return on Net

question 110

True/False

The net profit to equity ratio (or the return on net worth ratio)measures the owners' rate of return on investment.

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Definitions:

Current GAAP

Generally Accepted Accounting Principles as they are presently defined and practiced in the United States for financial reporting.

Direct Method

A way of reporting cash flows from operating activities by showing major classes of gross cash receipts and payments.

Operating Activities

Operating activities involve the primary day-to-day functions of a business related to producing and selling its goods or services.

Statement of Cash Flows

A financial statement that provides a detailed analysis of what happened to a company's cash during a period, categorizing cash flows into operating, investing, and financing activities.