1.When calculating ROA, net income is measured before interest and the income ta
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1.When calculating ROA, net income is measured before interest and the income tax impact of that interest because: (Pick all that apply, if any).Question 9 options: Removing the effect of interest without adjusting for the increase in income tax that would result would understate the ratio. That way, the analyst can observe how well management has utilized the assets to earn a profit before considering the impact on net income of how those assets were financed. Doing so provides the best measure of return on the owners' investment. Interest expense is not included in the income statement and, therefore, not deductible in calculating income tax.
2. Publix's 2011 balance sheet shows average shareholders' equity of $4,503 million, net operating profit after tax of $27 million, net income of $50 million, and common shares issued of $758 million. The company has no preferred shares issued. Kroger's return on common equity for the year is: Question 10 options: 0.60% 54.0% There is not enough information to calculate the ratio. 1.11% 3.56% 3.A current ratio greater than 1.0 is generally desirable for a company. Smith does not think much of fixed numerical benchmarks for financial ratios and suggests comparing a firm's ratio values with industry averages and/or ratio values for industry leaders. Question 8 options: True False 1.When calculating ROA, net income is measured before interest and the income tax impact of that interest because: (Pick all that apply, if any).
1.When calculating ROA, net income is measured before interest and the income tax impact of that interest because: (Pick all that apply, if any).
Removing the effect of interest without adjusting for the increase in income tax that would result would understate the ratio. That way, the analyst can observe how well management has utilized the assets to earn a profit before considering the impact on net income of how those assets were financed. Doing so provides the best measure of return on the owners' investment. Interest expense is not included in the income statement and, therefore, not deductible in calculating income tax.
2. Publix's 2011 balance sheet shows average shareholders' equity of $4,503 million, net operating profit after tax of $27 million, net income of $50 million, and common shares issued of $758 million. The company has no preferred shares issued. Kroger's return on common equity for the year is: Question 10 options: 0.60% 54.0% There is not enough information to calculate the ratio. 1.11% 3.56% 3.A current ratio greater than 1.0 is generally desirable for a company. Smith does not think much of fixed numerical benchmarks for financial ratios and suggests comparing a firm's ratio values with industry averages and/or ratio values for industry leaders. Question 8 options: True False Removing the effect of interest without adjusting for the increase in income tax that would result would understate the ratio. That way, the analyst can observe how well management has utilized the assets to earn a profit before considering the impact on net income of how those assets were financed. Doing so provides the best measure of return on the owners' investment. Interest expense is not included in the income statement and, therefore, not deductible in calculating income tax.
2. Publix's 2011 balance sheet shows average shareholders' equity of $4,503 million, net operating profit after tax of $27 million, net income of $50 million, and common shares issued of $758 million. The company has no preferred shares issued. Kroger's return on common equity for the year is: 2. Publix's 2011 balance sheet shows average shareholders' equity of $4,503 million, net operating profit after tax of $27 million, net income of $50 million, and common shares issued of $758 million. The company has no preferred shares issued. Kroger's return on common equity for the year is: 0.60% 54.0% There is not enough information to calculate the ratio. 1.11% 3.56% 3.A current ratio greater than 1.0 is generally desirable for a company. Smith does not think much of fixed numerical benchmarks for financial ratios and suggests comparing a firm's ratio values with industry averages and/or ratio values for industry leaders. Question 8 options: True False 0.60% 54.0% There is not enough information to calculate the ratio. 1.11% 3.56% 3.A current ratio greater than 1.0 is generally desirable for a company. Smith does not think much of fixed numerical benchmarks for financial ratios and suggests comparing a firm's ratio values with industry averages and/or ratio values for industry leaders. 3.A current ratio greater than 1.0 is generally desirable for a company. Smith does not think much of fixed numerical benchmarks for financial ratios and suggests comparing a firm's ratio values with industry averages and/or ratio values for industry leaders. True False Removing the effect of interest without adjusting for the increase in income tax that would result would understate the ratio. That way, the analyst can observe how well management has utilized the assets to earn a profit before considering the impact on net income of how those assets were financed. Doing so provides the best measure of return on the owners' investment. Interest expense is not included in the income statement and, therefore, not deductible in calculating income tax.
Explanation / Answer
1..When calculating ROA, net income is measured before interest and the income tax impact of that interest because:
ANS] Doing so provides the best measure of return on the owners' investment.
2. Publix's 2011 balance sheet shows average shareholders' equity of $4,503 million, net operating profit after tax of $27 million, net income of $50 million, and common shares issued of $758 million. The company has no referred shares issued. Kroger's return on common equity for the year is:
ANS]RETURN ON COMMON EQUITY = NET OPERTAING PROFIT AFTER TAX/AVERAGE SHAREHOLDRES EQUITY * 100
= 27/4503 * 100
= 0.60%
THEREFORE ANSWER IS 0.60%
3.A current ratio greater than 1.0 is generally desirable for a company. Smith does not think much of fixed numerical benchmarks for financial ratios and suggests comparing a firm's ratio values with industry averages and/or ratio values for industry leaders:
ANSWER :- TRUE
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