WGU C175 ACCOUNTING FOR DECISION MAKERS QUESTIONS WITH CORRECT ANSWERS

Fixed Asset Turnover


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the number of dollars in sales generated by each dollar of fixed asset




Margin is


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the profitability (net income/sales)

,Return on Assets (ROA) equation


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Net Income/Total Assets




DuPont Framework


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A measure of the amount of profit earned per dollar of investment.




Asset Turnover = Sales /
Total Assets


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Number of dollars of sales during the year generated by each dollar of
assets




Investors generally prefer high leverage in order to increase the size of their company
without increasing their investment, but lenders prefer low leverage to increase the
safety of their debt. T/F


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, True




Margin is:


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the profitability of each dollar in sales




Turnover is:


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the degree to which assets are used to generate sales.




Assets-to-Equity = Total Assets /
Stockholders' Equity


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(Also DuPont Framework) Number of dollars of assets acquired for each
dollar invested by stockholders




Return on Equity = Net Income /
Stockholders' Equity


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