The Cash Flow on Total Assets Ratio Is Calculated By

question 118

Multiple Choice

The cash flow on total assets ratio is calculated by:

• A) Dividing cash flows from operations by average total assets.
• B) Dividing total cash flows by average total assets.
• C) Dividing average total assets by cash flows from investing activities.
• D) Dividing average total assets by total cash flows.
• E) Total cash flows divided by average total assets times 365.

---

Definitions:

Variable Costing

An accounting method where only variable production costs are included in product cost, with fixed overhead costs treated as period expenses.

Absorption Costing

An accounting method that includes all manufacturing costs (direct materials, direct labor, and both variable and fixed manufacturing overhead) in the cost of a product.

Net Profit

The amount of money a company earns after deducting all its expenses, taxes, and costs from its total revenue.

Variable Manufacturing Costs

Costs that fluctuate with the level of production, including direct materials, direct labor, and variable manufacturing overhead.