Financial Management - Study Mode
[#336] A formula such as net income available to common stockholders divided by common equity is used to calculate
Correct Answer
(C) return on common equity
Explanation
Solution: A formula such as net income available to common stockholders divided by common equity is used to calculate return on common equity. The Return on Common Equity (ROCE) ratio refers to the return that common equity investors receive on their investment.
[#337] Companies that help to set benchmarks are classified as
Correct Answer
(B) benchmark companies
Explanation
Solution: Companies that help to set benchmarks are classified as benchmark companies. Benchmarking is the practice of comparing business processes and performance metrics to industry bests and best practices from other companies.
[#338] Total assets divided common equity is a formula uses for calculating
Correct Answer
(A) equity multiplier
Explanation
Solution: Total assets divided common equity is a formula uses for calculating equity multiplier. The equity multiplier is a financial leverage ratio that measures the amount of a firm's assets that are financed by its shareholders by comparing total assets with total shareholder's equity.
[#339] 'Judicious use of leverage' is suggested by:
Correct Answer
(C) Traditional Approach
[#340] If the average balance of debtors has increased, which of the following might not show a change in general?
Correct Answer
(B) Average Payables