Segment Return on Assets Is Segment Operating Income Divided by Segment

question 52

True/False

Segment return on assets is segment operating income divided by segment average assets.

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Definitions:

Stockholders' Equity

The residual interest in the assets of a corporation after deducting its liabilities, often referred to as shareholder’s equity or owners' equity.

Asset Turnover Ratio

A profitability ratio that measures how effectively a business is using its assets to generate sales, computed as sales divided by average total assets.

Long-Term Investments

Assets that a company intends to hold for more than a year, such as stocks, bonds, or real estate.

Fixed Assets

Long-term tangible assets used in the operation of a business and not expected to be converted into cash within one year, such as buildings, machinery, and equipment.