The market-to-book ratio is the ratio of a firm that reports negative retained earnings on its equity statement is less than one (i.e., market value of equity is less than book value of equity) True OR False

The market-to-book ratio is the ratio of a firm that reports negative retained earnings on its equity statement is less than one (i.e., market value of equity is less than book value of equity) True OR False

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter12: Fainancial Statement Analysis

Section: Chapter Questions

Problem 19MCQ

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The market-to-book ratio is the ratio of a firm that reports negative retained earnings on its equity
statement is less than one (i.e, market value of equity is less than book value of equity) True OR
False

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In the DuPont return on equity disaggregation, which of the following is NOT a driver of profitability: A) Profit Margin B) Accounts Payable Turnover C) Operating Expense Margin D) Gross Profit Margin
Which of the following typically is true for profitability ratios? a. Growth stocks have lower price to earnings ratios.b. Companies in more competitive industries have higher profit margins.c. The gross profit ratio declines as competition increases.d. When a company has debt, its return on equity will be lower than its return on assets.
a. How does the return on total assets differ from the return on stockholders’ equity?b. Which ratio is normally higher? Why?
Please explain your answer...and please don't give plagiarized answer.
The balance in retained earnings is not affected by Choose net income. aluation of a company's ability to pay current net loss. issuance of common stock. dividends.
Which of the following is NOT a measure of a company's profitability? a) Return on Investment (ROI) b) Earnings Before Interest and Taxes (EBIT) c) Gross Profit Margin d) Debt -to-Equity Ratio
Which of the following statements is true about vertical analysis? O a. It is not useful for analyzing changes in financial statements over time O b. It is useful in analyzing relationships within a financial statement. O c. Each line item is expressed as a percent of stockholders' equity. O d. The amount of change in each line item is calculated.
The price/earnings ratio is commonly used by investors to OA. evaluate their ability to earn a return on their investment OB. determine the market value of the company OC. determine the market price per share of stock of a company OD. determine if the company has a low amount of debt
Which of the following statements are true about the interest-burden ratio? Check all that apply: It can be expressed as EBIT/Interest Expense. If the company has no financial leverage, the interest-burden ratio will be equal to 0. A company with higher financial leverage will have a lower interest-burden ratio. If the company has no financial leverage, the interest-burden ratio will be equal to 1. It can be expressed as Net profits/Pretax profits.
Which of the following statements is true? I. The formula for the return on equity is: Return on equity = Net income ÷ Average total stockholders' equity. II. When computing the return on equity, retained earnings should be excluded from the average total stockholders' equity.
Which of the following statements are true about the interest-burden ratio? Check all that apply: If the company has no financial leverage, the interest-burden ratio will be equal to 1. A company with higher financial leverage will have a lower interest-burden ratio. if the company has no financial leverage, the interest-burden ratio will be equal to 0. It can be expressed as Net profits/Pretax profits. It can be expressed as EBIT/Interest Expense.
What is the impact of decrease in assets or increase in liabilities resulting in decreases in equity, other than distributions to equity holders on the profit of the company? a.None of the options b.The profit of the company declines c.The profit of the company remains d.The profit of the company inclines