Which of the Following Will Increase Return on Equity

question 41

Multiple Choice

Which of the following will increase return on equity?

• A) An increase in sales with a proportionate increase in costs and expenses
• B) An increase in sales relative to the asset base
• C) A decrease in leverage
• D) Both A and C

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Definitions:

Non-financial Measure

Performance measures that are not expressed in monetary units but rather in terms of physical units, percentages, indexes, or any other non-monetary metrics.

Customer Satisfaction Rating

A measure, often expressed as a percentage or scale, of the degree to which customers are happy with a product or service.

Financial Outcomes

The monetary results of an organization's operations and activities, reflecting its financial health and profitability.

Traditional Accounting System

An accounting system primarily focused on the preparation of financial statements and compliance with accounting standards, often with less emphasis on detailed cost tracking or management decision support.