True or false?

a. A company's return on equity will always equal or exceed its return on assets.

b. A company's assets-to-equity ratio always equals one plus its liabil- ities to equity ratio.

c. A company's collection period should always be less than its payables period.

d. A company's current ratio must always be larger than its acid test ratio.

e. All else being equal, a firm would prefer to have a higher asset turnover ratio.

f. Economic earnings are always more volatile than accounting earnings. g. Ignoring taxes and transactions costs, unrealized paper gains are less valuable than realized cash earnings. h. Two firms can have the same earnings yield but different price-to- earnings ratios.

AppendixLO1