Which of the following items will not cause the company's ROA to increase?Multiple ChoiceOOReducing costs.Reducing company assets without impacting sales.Increasing company assets.Increasing the selling price per unit.$

ROA (Return on Assets) is a financial metric that measures a company's ability to generate earnings…

Which of the following items will not cause the company's ROA to increase? Multiple Choice O O O Reducing costs. Reducing company assets without impacting sales. Increasing company assets. Increasing the selling price per unit.

Which of the following items will not cause the company's ROA to increase? Multiple Choice O O O Reducing costs. Reducing company assets without impacting sales. Increasing company assets. Increasing the selling price per unit.

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 44MCQ: When a Dupont analysis reveals that a company has much higher than average asset turnover and much...

See similar textbooks

Related questions

Q: The margin of safety can be defined as the amount by which sales can decrease before losses are…

A: Total sales of a company can be divided into Margin of safety sales and break even sales.

Q: Break-even analysis is concerned with determining a point at which the company can minimize total…

A: Breakeven analysis is very important done by management and cost accountants of the business. With…

Q: What is the major benefit of Breakeven Analysis? AB A. B. C. OP D. It allows you to know how much…

A: Break-even analysis in economics, business, and cost accounting refers to the point at which total…

Q: At the break-even point, sales and costs are exactly equal. However, the goal of most companies is…

A: If a company makes $ 5 off of each unit it sells and has a target operating income of $ 5,000, then…

Q: When sales volume increases, which company will experience a larger percentage increase in profit:…

A: Cost Volume Profit Analysis (CVP Analysis): This analysis is helpful in determining that how any…

Q: Discuss the concept of cost of goods sold. Why is it so important? What is the downside for you, as…

A: 1 a Cost of goods sold (COGS) is a key concept in accounting that refers to the cost of the goods…

Q: Would an increase in variable costs per unit cause a company’s break-even point to increase or…

A: Variable cost is an amount that changes in total in proportion to the volume produced and sold…

Q: When selling price is constant and variable costs increases. What will be the effect to the net…

A: In the given example, it is assume that selling price is constant in both the cases and variable…

Q: What is the Profit Margin Ratio of your business X, which has the attached P&L (Profit & Loss)…

A: Formula = Profit margin = Net profit/sales × 100

Q: Which one of the following is not considered an assumption of cost-volume-profit analysis? a. Costs…

A: Cost volume profit analysis is also known as CVP analysis. It shows how profits of the organisation…

Q: If XYZ Company sells unit outputs that exceed the breakeven point, a. there will be an increase in…

A: CVP investigation takes a goose at the impact of deals volume minor departure from prices and…

Q: Which of the following statements is true? A In linear break-even analysis, the contribution margin…

A: As per the linear break-even model, the contribution margin per unit is the difference between the…

Q: A high operating margin implies that ______________ . The company is in a better position to…

A: Operating margin means proportion of operating income over sales

Q: When sales volume is rising do companies with a larger percentage of variable expenses or companies…

A: Hence companies with a larger percentage of variable expenses provide a larger percentage increase…

Q: Which of the following is true regarding the contribution margin ratio of a company that produces…

A: Contribution margin is one of the important terms under the Cost Volume Profit analysis.Contribution…

Q: “A customer-profitability profile highlights those customers a company should drop to improve…

A: Customer profitability analysis: Customer profitability analysis is a management accounting tool…

Q: Which of the following will not result in an increase in return on investment (ROI), assuming other…

A: An increase in operating assets will not result in an increase in return on investment (ROI). The…

Q: How does good operating leverage magnify earnings results with modest revenue increase?

A: Operating Leverage: A cost-accounting technique called operational leverage assesses how much a…

Q: Which of the following statements is true? I. Incremental analysis is an analytical approach that…

A: In this set of statements, we will examine the accuracy of each statement in the context of…

Q: A company's break-even point will not be changed by:

A: Break-even point i Break-even point is a level of activity where no profit is gained and no loss…

Q: 1. The difference between contribution margin and income from operations is ________. net income…

A: Fixed costs = Contribution margin - Income from operations Operating leverage = Contribution margin…

Q: Which of the following costs are always incremental and relevant in decision analysis? a)…

A: Avoidable costs are those costs that can be avoided if some production is stopped or outsourcing of…

Question

Which of the following items will not cause the company's ROA to increase?
Multiple Choice
O
O
Reducing costs.
Reducing company assets without impacting sales.
Increasing company assets.
Increasing the selling price per unit.
$

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1: Explanation of the concept of ROA

VIEW

Step 2: Determining the correct option

VIEW

Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Which of the following costs are always incremental and relevant in decision analysis? a) Opportunity costs and sunk costs b) Avoidable costs and opportunity costs c) Only avoidable costs d) Avoidable costs and sunk costs Which of the following will increase a company's breakeven point? a) reducing its total fixed costs b) increasing the selling price per unit c) increasing variable cost per unit d) increasing contribution margin per unit
Assuming everything else constant, which of the following will NOT make net profit margins increase? Decrease in Selling, General, and Administrative expenses. Increase in Research & Development expenses. Decrease Research & Development expenses. Decrease costs of goods sold.
The difference between the average customer’s willingness to pay and the total costs of a product is known as ______. When a company makes a profit, the difference between the price of the product and the cost of production is known as what? Value creation and value capture are key concepts for which parts of business? If a company innovates in a way that reduces its production costs without affecting any features of the product, would that create value? Suppose a price war was to erupt in the airline market, which causes prices for flights to decline, but affected nothing else about the industry. Would this change the value created by airlines? Suppose a price war was to erupt in the airline market, which causes prices for flights to decline, but affected nothing else about the industry. Would this change the value captured by airlines? Please solve all part and do not give solution in image format thanku
Which of the following statements is true? I. Incremental analysis is an analytical approach that focuses only on those revenues and costs that will not change as a result of a decision. II. When expressed on a per unit basis, fixed costs can mislead decision makers into thinking of them as variable costs. II. To estimate what the profit will be at various levels of sales volume, multiply the number of units to be sold above or below the break-even point by the unit contribution margin. Statements I and III are true. Statements II and III are true. All of the statements are true. None of the statements are true.
For CVP analysis calculations, which of the following statements is correct? A. In target profit calculations, sales revenue is less than total costs. B. CVP analysis relies on our knowledge of cost function to express relationships among costs, sales volume, and profit. OC. A company's sales mix is ultimately determined by the management of a company. D. The Break-even point is the point at which operating income is greater than $0. O E. If sales volume is expected to be higher than the indifference point, management should choose the cost structure with the higher fixed costs.
5
When a Dupont analysis reveals that a company has much higher than average asset turnover and much lower than average profit margin, what can be concluded about the companys strategy? a. It is a product differentiator. c. It has no strategy. b. It needs to concentrate on improve- d. It is a low-cost provider ing its profit margins.
In a cost-volume-profit analysis, explain what happens at the break-even point and why companies do not want to remain at the break-even point.
A company can lower its break-even point by any of the following except by: Question 4Answer a. reducing its total fixed expenses b. increasing the selling price per unit c. increasing production d. increasing contribution margin
which of the following occurs if a company decreases its selling price per unit? a. net income increase b. more than one of the answers would occur c. contribution margin ration increase d. break even point increase e. contribution magrin increase
1. The difference between contribution margin and income from operations is ________. net income variable costs fixed costs None of these choices are correct. 2. The relationship between a company’s contribution margin and income from operations is measured by _____. contribution margin operating leverage margin of safety break-even point 3. The __________ is the relative distribution of sales among the products sold by a company. sales mix mixed cost product mix None of these choices are correct. 4. The unit selling price of the overall enterprise product equals the ________. average selling price of the products price of the highest-selling product in the mix sum of the unit selling prices of each product multiplied by its sales mix percentage price of the product having the lowest selling price
Mastery Problem: Target Income and Margin of Safety Target Income and Margin of Safety At the break-even point, sales and costs are exactly equal. However, the goal of most companies is to make a profit. When a company decides that it wants to earn more than the break-even point of income, it must define the amount it thinks it will realistically make. By modifying the break-even equation, the sales required to earn a target or desired amount of profit may be computed. Complete the following: If a company makes $5 off of each unit it sells and has a target operating income of $5,000, then it must sell units. Similarly, if a company has a target operating income of $75,000 and knows that total expenses for the period will be $75,000, how much revenue must it earn to reach its target operating income? $ Units sold or revenue earned above and beyond the break-even point contributes to the margin of safety for a company. Margin of safety is a crude measure of risk, in that it serves as the…