1. A company can usually increase sales without increasing which one of the foll
ID: 2756333 • Letter: 1
Question
1. A company can usually increase sales without increasing which one of the following (accounts receivable, cost of sales, accounts payable, inventory, or fixed assets)?
2. A company computes its earnings retention ratio, dividend yield, and capital intensity ratio:
Which figure represents the amount of assets the company needs in order to generate a $1 of earnings?
Which figure represents the percentage of earnings a company reinvests in its business?
Which figure represents the relationship between a company’s dividend payout and its market value?
Explanation / Answer
A company can increase its sales without increasing its fixed assets
Thus answer will be fixed assets.
Intensity ration represents the amount of assets the company needs in order to generate a $1 of earnings.
Retention ratio represents the percentage of earnings a company reinvests in its business.
Dividend yeild represents the relationship between a company’s dividend payout and its market value.
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