41.Which of the following measures the outcome of a company's investment decisions by comparing the profits the company generates from producing and selling goods and services with the total amount invested in assets?
a.operating leverage
b.return on assets
c.profit margin
d.asset turnover
42.A company "earned 15.5¢ of profit for every dollar invested in assets.” This statement reflects a measure of
a.operating leverage
b.return on assets
c.profit margin
d.asset turnover
43.Which of the following measures the ability of a company to produce profits from its sales?
a.operating leverage
b.return on assets
c.profit margin
d.asset turnover
44.Which of the following equations is correct?
a.return on assets = profit margin x asset turnover
b.profit margin = return on assets x asset turnover
c.asset turnover = return on assets x profit margin
d.return on assets = net income x total assets
45.A company "was able to generate $3.75 of sales for every $1 it had invested in assets.” This statement represents a measure of
a.operating leverage
b.return on assets
c.profit margin
d.asset turnover
46.The conclusion that a company "was able to generate 81.5¢ of net income for every $1 of sales" reflects a measure of
a.operating leverage
b.return on assets
c.profit margin
d.asset turnover
47.If a company's profit margin increases, most likely indicates that the company has
a.become more effective in using its assets to sell its products
b.become more efficient in controlling its costs
c.invested in more plant assets
d.become more competitive
Figure 11-2
Sales$18M
Return on assets15%
Asset turnover1.20
48.Refer to the table in Figure 11-2. Compute profit margin.
a.12.5%
b.19.2%
c.8.0%
d.15.0%
49.Refer to the table in Figure 11-2. Compute total assets.
a.$120.0M
b.$ 15.0M
c.$ 2.7M
d.$ 21.6M
50.Refer to the table in Figure 11-2. Compute net income.
a.$5.76M
b.$2.25M
c.$1.44M
d.$2.70M