The following information is available from the annualreport of Frixell, Inc.: Currentliabilities . . . . $300,000Operatingincome . . . . . 240,000Net income . . . . 80,000 Currentassets . . . . $ 480,000Average totalassets . . . . 2,000,000Average totalequity . . . . 800,000Which of the following statements are correct? (More thanone statement may be correct.)a. The return on equity exceeds the return on assets.b. The current ratio is 0.625 to 1.
The following information is available from the annualreport of Frixell, Inc.: Currentliabilities . . . . $300,000Operatingincome . . . . . 240,000Net income . . . . 80,000 Currentassets . . . . $ 480,000Average totalassets . . . . 2,000,000Average totalequity . . . . 800,000Which of the following statements are correct? (More thanone statement may be correct.)a. The return on equity exceeds the return on assets.b. The current ratio is 0.625 to 1.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The following information is available from the annual
report of Frixell, Inc.:
Current
liabilities . . . . $300,000
Operating
income . . . . . 240,000
Net income . . . . 80,000
Current
assets . . . . $ 480,000
Average total
assets . . . . 2,000,000
Average total
equity . . . . 800,000
Which of the following statements are correct? (More than
one statement may be correct.)
a. The return on equity exceeds the return on assets.
b. The
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