The asset turnover ratio measures ________
A) how efficiently a business uses its sales to finance the assets
B) how efficiently a business uses its average total assets to generate sales
C) how efficiently a business uses its net profit to finance the assets
D) how the ending inventory helps increase the value of assets
B
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Consider two companies in a world with no taxes that are alike except in borrowing choices. Barry Corp. has no debt financing, and Crawford Corp. uses debt financing. The EBIT for both companies is $100
Barry Corp. has 40 shares outstanding and pays no interest. Crawford Corp. has 30 shares outstanding and pays $25 in interest. What is the EPS for each company? A) Both companies have an EPS of $2.50. B) Both companies have an EPS of $2.00. C) Barry Corp. has an EPS of $2.50 and Crawford Corp. has an EPS of $2.00. D) Barry Corp. has an EPS of $2.00 and Crawford Corp. has an EPS of $2.50.
If an auditor assigns a tolerable misstatement of $1,000 to accounts payable, he or she would need to obtain more audit evidence for that account than if $100,000 had been assigned
Indicate whether the statement is true or false