BUSINESS ADMINISTRATION
PRINCIPLES AND PRACTICE OF MANAGEMENT
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
True
|
|
|
False
|
Detailed explanation-1: -The return on shareholders’ equity ratio shows how much money is returned to the owners as a percentage of the money they have invested or retained in the company. It is one of five calculations used to measure profitability.
Detailed explanation-2: -Net Income appears on both the income statement and the statement of owner s equity. The net income as per the income statement is carried over to the statement of owner’s equity. The Capital Account’s ending balance appears on both the balance sheet and the statement of owner’s equity.
Detailed explanation-3: -Net income (NI) is calculated as revenues minus expenses, interest, and taxes. Earnings per share are calculated using NI. Investors should review the numbers used to calculate NI because expenses can be hidden in accounting methods, or revenues can be inflated.
Detailed explanation-4: -Net Income margin = Net Income/Total Revenue You divide the bottom line number on the income statement by the top line number to get a percentage. For example, if you get 5%, that means you earn 5 cents for every dollar of sales after taking your expenses into account.