KSU accounting 231 exam 2 review
Question and answers correctly solved
2025/2026
gross margin ratio -CORRECTANSWER analyzes the portion of sale leftover after
deducting the COGS
gross margin ratio formula -CORRECTANSWER Gross margin/net sales (want it to be
higher than industry average)
return on sales ratio -CORRECTANSWER shows how good a job we do of keeping the
sales revenue
return on sales ratio formula -CORRECTANSWER net income/net sales(higher than
industry average)
earnings per share (EPS) -CORRECTANSWER allows for a relative comparison
between companies (compare lowes against home depot)
earnings per share formula -CORRECTANSWER net income/#shares of stock
outstanding
, return on assets ratio -CORRECTANSWER looks at two important profitability elements
: earning and investments
return on assets ratio formula -CORRECTANSWER net income/total assets (higher
than industry average)
return on equity ratio -CORRECTANSWER "financial leverage" it links the income
statement to the balance sheet
return on equity formula -CORRECTANSWER net income/total stockholder's equity
what is the statement of owner's equity? -CORRECTANSWER shows the change in the
net value of the business for a period of time (tracks the balance of the resources
claimed by the owners)
what title applies to the st. of OE? -CORRECTANSWER sole props & partnerships.
What is the balance sheet? -CORRECTANSWER Assets=liabilities+OE
what are assets? -CORRECTANSWER the right to use resources that have expected
future economic benefit
Question and answers correctly solved
2025/2026
gross margin ratio -CORRECTANSWER analyzes the portion of sale leftover after
deducting the COGS
gross margin ratio formula -CORRECTANSWER Gross margin/net sales (want it to be
higher than industry average)
return on sales ratio -CORRECTANSWER shows how good a job we do of keeping the
sales revenue
return on sales ratio formula -CORRECTANSWER net income/net sales(higher than
industry average)
earnings per share (EPS) -CORRECTANSWER allows for a relative comparison
between companies (compare lowes against home depot)
earnings per share formula -CORRECTANSWER net income/#shares of stock
outstanding
, return on assets ratio -CORRECTANSWER looks at two important profitability elements
: earning and investments
return on assets ratio formula -CORRECTANSWER net income/total assets (higher
than industry average)
return on equity ratio -CORRECTANSWER "financial leverage" it links the income
statement to the balance sheet
return on equity formula -CORRECTANSWER net income/total stockholder's equity
what is the statement of owner's equity? -CORRECTANSWER shows the change in the
net value of the business for a period of time (tracks the balance of the resources
claimed by the owners)
what title applies to the st. of OE? -CORRECTANSWER sole props & partnerships.
What is the balance sheet? -CORRECTANSWER Assets=liabilities+OE
what are assets? -CORRECTANSWER the right to use resources that have expected
future economic benefit
