Question

TRUE/FALSE 1) The return on total assets ratio is not a profitability measure. 1) 2) The return on total assets can be calculated as profit margin divided by total asset turnover. 2) 3) A company that has days' sales uncollected of 30 days and days' sales in inventory of 18 days implies that inventory will be converted to cash in about 12 days. 3) 4) The higher the accounts receivable turnover, the less quickly accounts receivable are collečted.4) 5) Efficiency refers to how productive a company is in using its aesis, and is usually measured relative to how much revenue is generated from a certain level of assets. 5) 6) The greater the times interest earned ratio, the lower the risk a company i s exposed to. 6) as financial leverage because debt 7) The use of debt is sometimes described the return on equity. 7) 8) Capital structure refers to a company's long-run financial viability and its ability to cover long-term obligations. 8) 9) An advantage of common-size statements is that they reflect the dollar magnitude (size) of the different companies under analysis. 9) 10) Liquidity refers to the availability of resources to meet long-term cash requirements. 10)

Answer 1

1. True- RONA is a profitability ratio.

2. True..RONA formula= profit margin divided by total assets

3. False..You need to add both to get the result= 18+30=48 days

4. false.. It is other way round..higher account receivable turnover ratio indicates faster collections.

Please raise additional questions for remaining part as per Chegg policy.