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Question
Use the cash flow on total assets ratio to determine which of these three companies is using its assets most efficiently.
| Company A | Company B | Company C | |
| Cash provided by operations | $ 300,000 | $ 600,000 | $ 400,000 |
| Cash provided (used) by investing activities | |||
| Purchase of operating assets | (190,000) | (380,000) | (200,000) |
| Cash provided (used) by financing activities | |||
| Repayment of debt | (100,000) | (210,000) | (190,000) |
| Net Increase in cash | $ 10,000 | $ 10,000 | $ 10,000 |
| Average total assets | $ 2,500,000 | $ 6,000,000 | $ 5,000,000 |
A. Company A.
B. Company B.
C. Company C.
D. As all the companies have the same net increase in cash, they are all equally efficient in the use of their assets.
E. Cannot be determined from the given information.
Answer
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Related questions
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Periods
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B. Neither product A nor product B should be processed further.
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E. A processing further decision cannot be made from the available data.
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B. Income will increase by $7 per unit.
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Q:
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A. Total cost times markup percentage.
B. Total cost per unit times markup percentage per unit.
C. Total cost per unit divided by markup percentage per unit.
D. Markup percentage per unit divided by total cost per unit.
E. Markup percentage divided by total cost.
Q:
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B. Perfect predictions of future outcomes.
C. Results from past outcomes only.
D. Results from current outcomes only.
E. Speculation of interest rates and economic performance only.
Q:
If net present values are used to evaluate two investments that have equal costs and equal total cash flows, the one with more cash flows in the early years has the higher net present value.