Which of the Following Ratios Would Not Be Affected by the Choice

question 48

Multiple Choice

Which of the following ratios would not be affected by the choice of depreciation methods?

• A) Working capital turnover
• B) Earnings per share of common stock
• C) Debt to equity
• D) Price-earnings ratio

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Definitions:

Cost of Goods Manufactured

The total production cost of goods that are completed during an accounting period, including raw materials, labor, and overhead expenses.

Direct Labor Costs

Expenses directly associated with the labor used in the production of goods or services.

Manufacturing Overhead

Costs incidental to the manufacturing process that do not include the costs of direct materials and direct labor.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including the cost of materials and labor.