Which of the following situations is most likely to explain a net operating asset turnover that is higher than the industry norm?

Which of the following situations is most likely to explain a net operating asset turnover that is higher than the industry norm? 

A. The company has more recently purchased fixed assets
B. The company uses FIFO while competitors use LIFO
C. The company uses accelerated depreciation method while competitors use straight line
D. The company extends more credit to customers than competitors

Answer: C

Which of the following situations is most likely to explain an accounts receivable turnover that is lower than the industry norm?

Which of the following situations is most likely to explain an accounts receivable turnover that is lower than the industry norm? 

A. The company makes less credit sales than industry
B. The company gives customers less time to pay than its competitors
C. The company has been selling inferior products to competitors
D. The company is systematically over-estimating bad debts

Answer: C

Which of the following statements about the return on shareholders' investment (ROSI) is correct?

Which of the following statements about the return on shareholders' investment (ROSI) is correct? 

A. If book value of equity is less than market value, ROSI is greater than ROCE
B. ROSI will be higher the greater the dividend payout ratio
C. ROSI is likely to be more volatile than ROCE
D. ROSI normally equals ROCE

Answer: C

Which of the following statements about the equity growth rate is correct?

Which of the following statements about the equity growth rate is correct? 

I. the higher the ROCE the higher equity growth rate, all other things equal
II. the higher the dividend payout the higher the equity growth rate
III. the equity growth rate is unaffected by the cost of debt
IV. the equity growth rate indicates the expected growth in stock price each period



A. I, II, III and IV
B. I, II and III
C. I and III
D. I only

Answer: D