U1 AOS 2 Post-Progress Check 4 Revision Flashcards
(14 cards)
What is the formula for calculating Net Profit Margin?
Net Profit Margin = (Net Profit / Net Revenue) x 100
True or False: A higher Net Profit Margin indicates a more profitable company.
True
Fill in the blank: The Net Profit Margin is expressed as a _____ percentage.
percentage
What does a Net Profit Margin of 20% mean?
It means that for every dollar of revenue, the company earns 20 cents in profit.
Which of the following would likely decrease a company’s Net Profit Margin? A) Increasing sales volume B) Reducing operating expenses C) Increasing cost of goods sold D) Improving pricing strategy
C) Increasing cost of goods sold
What is the formula for calculating Asset Turnover?
Asset Turnover = Net Sales / Average Total Assets
True or False: A higher asset turnover ratio indicates that a company is using its assets more efficiently.
True
Fill in the blank: Return on Assets (ROA) measures a company’s __________ in relation to its total assets.
profitability
Which of the following factors can affect the Asset Turnover ratio? A) Industry type B) Company size C) Economic conditions D) All of the above
D) All of the above
What does a Return on Assets (ROA) of 5% indicate?
The company earns 5 cents for every dollar of assets.
What are the three main components of a cash flow statement?
Operating activities, investing activities, and financing activities.
True or False: The income statement shows a company’s financial position at a specific point in time.
False
Which financial statement provides a summary of revenues and expenses over a period?
Income Statement
Multiple Choice: Which of the following is NOT a section of the cash flow statement? a) Operating activities b) Equity activities c) Investing activities d) Financing activities
b) Equity activities
