Question 10 of 30

Which of the following statements is true?

Net income divided by average common stockholders' equity is the calculation for the return on common stockholders' equity.

Book value per share of common stock is calculated by dividing the common stockholders' equity by the number of common shares outstanding at year end.

The following ratios are all profitability ratios:

- Net sales to assets

- Return on total assets

- Return on stockholders' equity

The net income of a company for the year just ended is $230,000. Income tax is $80,500 and interest expense is $20,000. The number of times interest was earned would be 11.5.

The following ratios are all liquidity ratios:

- Quick ratio

- Current ratio

- Accounts receivable turnover ratio

The following ratios are all leverage ratios:

- Times interest earned

- Working capital

- Return on total assets