Which profit margin measures the overall operating efficiency of the firm?

(a) Gross profit margin.

(b) Operating profit margin.

(c) Net profit margin.

(d) Return on equity. 25, which ratio or ratios measure the overall efficiency of the firm in managing its investment in assets and in generating return to shareholders?

(a) Gross profit margin and net profit margin.

(b) Return on investment

(c) Total asset turnover and operating profit margin.

(d) Return on investment and return on equity. 26 What does a financial leverage index greater than one indicate about a firm?

(a) The unsuccessful use of financial leverage

(b) Operating returns more than sufficient to cover interest payments on borrowed funds

(c) More debe financing than equity financing.

(d) An increased level of borrowing