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Whether by implementing a strategy of differentiation or one of cost advantage, the common objective of a company is a.maximum return on equity b.positive earnings

Whether by implementing a strategy of differentiation or one of cost advantage, the common objective of a company is

a.maximum return on equity

b.positive earnings per share

c.an ROA above 8%

d.maximum leverage

On a common size income statement, all items are shown as:

a. percentages of net income.

b. percentages of gross revenue.

c. percentages of gross profit.

d. percentages of total assets.

If a firm is using financial leverage successfully what would be the impact of doubling operating earnings?

a.The return on equity will decline by half

b.The return on equity will more than double

c.The return on equity will double

d.The return on equity will increase, but not double

May Company's return on equity was 21% and the financial leverage ratio was 13% (positive). What was the return on assets?

a.8%

b.21%

c.34%

d.13%

An analytical tool for comparing two companies of different sizes is

a.financial leverage

b.short-term liquidity

c.Annual reports

d.common size statements

If the components of price/earnings ratio are inverted, the resulting percent is referred to as which of the following?

a.Book value per share.

b.Dividend yield ratio.

c.Capitalization rate.

d.Multiple.

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