21 which of the following is a summary measure of the success of a company 39 s fina 4352236

21.Which of the following is a summary measure of the success of a company's financing, investing, and operating activities?

a.return on assets

b.profit margin

c.return on equity

d.financial leverage

22.Which of the following companies, whose ROE and ROA are given, is probably the most valued by investors?

Co. #1Co. #2Co. #3Co. #4

ROA6.2%8.2%4.5%7.5%

ROE5.4%8.6%11.5%12.8%

a.Co. #1

b.Co. #2

c.Co. #3

d.Co. #4

23.Companies in highly-competitive markets with very similar products, usually will compete on the basis of

a.product differentiation

b.price

c.asset turnover

d.return on assets

24.Companies that compete using special product features

a.generally have a low profit margin

b.can charge a higher price and earn more per unit

c.keep their prices low to attract customers

d.depend on high sales volumes to earn a profit

25.Companies that rely on low costs

a.use a product differentiation strategy

b.require high profit margin

c.use a cost leadership strategy

d.require a low asset turnover

26.Companies that rely on product features

a.use a cost leadership strategy

b.require high asset turnover

c.keep their prices low to attract customers

d.require a high profit margin

27.Which of the following is NOT true?

a.a company selects operating strategies depending on the types of products they produce and sell

b.a company cannot compete in both cost leadership and product differentiation markets

c.a company that relies on low costs use a cost leadership strategy

d.product differentiation companies normally rely on brand name identification

28.Which of the following is consistent with a cost leadership strategy?

a.buying and selling in high volume

b.a higher profit margin than companies that do not follow a cost leadership strategy

c.offering many specialized customer services

d.a very low asset turnover

29.The ratio of cost of goods sold to inventory is known as

a.inventory turnover

b.asset turnover

c.accounts receivable turnover

d.return on sales

30.A company’s ability to convert its credit sales into cash is measured by

a.Inventory turnover

b.Asset turnover

c.Accounts receivable turnover

d.Return on sales

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