You are asked to briefly answer the following questions: Profitability ratios are a set of ratios that indicate how profits relate to sales and the size of a company's capital, and this category includes various ratios such as: Gross Profit Margin Ratio, Net Profit Margin Ratio, Return on Assets Ratio and Return on Equity Ratio of funds. One of the top executives at the company where you work is asking for your help in understanding the following: 1. How the above efficiency indicators are calculated. 2. The company decided to pay cash to suppliers to achieve better purchase prices. What is the effect of this fact on the value of the aforementioned efficiency indicators? 3. Could (beyond the above fact) be affected in any way positively the figures in question for the company where you work?

You are asked to briefly answer the following questions: Profitability ratios are a set of ratios that indicate how profits relate to sales and the size of a company's capital, and this category includes various ratios such as: Gross Profit Margin Ratio, Net Profit Margin Ratio, Return on Assets Ratio and Return on Equity Ratio of funds. One of the top executives at the company where you work is asking for your help in understanding the following: 1. How the above efficiency indicators are calculated. 2. The company decided to pay cash to suppliers to achieve better purchase prices. What is the effect of this fact on the value of the aforementioned efficiency indicators? 3. Could (beyond the above fact) be affected in any way positively the figures in question for the company where you work?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter12: Balanced Scorecard And Other Performance Measures

Section: Chapter Questions

Problem 3PB: Evaluate the two departments for Moxie Products. Compare the years performance of the two...

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