Reference no: EM132913941

Problem 1: ABC Corp's 2019 ROE dropped fifty percent from 2018. If the reason was return on sales, what component of the DuPont framework has decreased?

Select an answer:

Option 1: Leverage
Option 2: Cash Flow
Option 3: Efficiency
Option 4: Profitability

Problem 2: Why would you use a current ratio to determine a company's financial health?

Select an answer:

Option 1: Current ratio is the measure of the current liabilities a company incurs.
Option 2: Current ratio is the measure of how a company uses leverage to obtain current assets.
Option 3: Current ratio is the measure of a company's ability to pay its short-term liabilities.
Option 4: Current ratio is the measure of a company's ability to pay its long-term liabilities.

Problem 3: On common size balance sheets, Company 1's inventory is 8% and Company 2's inventory is 14%. What do just these two percentages tell you?

Select an answer:

Option 1: ABC can do $100 of sales with less inventory than XYZ can.
Option 2: XYZ can do $100 of sales with less inventory than ABC can.
Option 3: ABC is better at turning its inventory than XYZ.
Option 4: XYZ is better at turning its inventory than ABC.