Question: What is the difference between the profit margin for ROA and the profit margin for ROCE? Suggest a scenario when a firms profit margin for

What is the difference between the profit margin for ROA and the profit margin for ROCE? Suggest a scenario when a firm’s profit margin for ROA would increase and its profit margin for ROCE would decrease.

Step by Step Solution

★★★★★

3.49 Rating (179 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

The profit margin for ROA ignores how a firm has financ... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Document Format (1 attachment)

Word file Icon

65-B-A-F-S (688).docx

120 KBs Word File

Students Have Also Explored These Related Accounting Questions!

Q:

Describe the difference between the profit margin for ROA and the profit margin for ROCE. Explain why each profit margin is appropriate for measuring the rate of ROA and the rate of ROCE,...

Q:

What is the difference between accounting profit and economic profit? How could a firm earn positive accounting profit but negative economic profit?

Q:

What is the difference between accounting profit and entrepreneurial profit?

Q:

What is the difference between the profit margin for ROA and the profit margin for ROCE? Suggest a scenario when a firms profit margin for ROA would increase and its profit margin for ROCE would...

Q:

Q 1 - Common - size analysis is a simple way to make financial statements of different firms comparable. What are possible shortcomings of comparing two different firms using common - size analysis?Q...

Q:

Describe the difference between the profit margin for ROA and the profit margin for ROCE. Explain why each profit margin is appropriate for measuring the rate of ROA and the rate of ROCE,...

Q:

4.2 Earnings per Share. Firm A reports an increase in earnings per share; Firm B reports a decrease in earnings per share. Is this unconditionally informative about each firm's performance? If not,...

Q:

Summarize the economic outlook for your industry. Look at recent market activity, recent indicators impacting your industry. Address recent change in stock prices. See the Analysis Tab of the FSAPfor...

Q:

Summarize the economic outlook for your industry. Look at recent market activity, recent indicators impacting your industry. Address recent change in stock prices. See the Analysis Tab of the FSAPfor...

Q:

Summarize the economic outlook for your industry. Look at recent market activity, recent indicators impacting your industry. Address recent change in stock prices. See the Analysis Tab of the FSAPfor...

Q:

Mars Electronics is a distributor for the Global Electric Company (GEC), a large manufacturer of electrical and electronics products for consumer and institutional markets. Below are the semiannual...

Q:

M. Bonzales has the following transactions during August of the current year. Indicate the effect on the accounting equation and on the debit-credit analysis. Aug. 1 Opens an office as a financial...

Q:

2 1 4 4 . Determining limits analytically Determine the following limits .

Q:

Asset Acquisition Logan Industries purchased the following assets and constructed a building as well. All this was done during the current year. Assets 1 and 2 These assets were purchased as a lump...

Q:

Using the future value tables, solve the following: Required 1. What is the value on January 1, 2014 of $40,000 deposited on January 1, 2007 which accumulates interest at 12% compounded annually? 2....

Q:

Refer to Home Depot's income statement contained in Appendix C of the textbook. Required a. Identify the line item just above Net Earnings. Explain in your own words what you think this line item...

Q:

Refer to Home Depot's classified balance sheet contained in Appendix C of the textbook. Required a. The current liability section contains an account entitled "Current Installments of Long-Term...

Q:

Lowell Corporation acquires a gold mine at a cost of $400,000. Development costs that were incurred total $100,000, including $12,300 of depreciation on movable equipment to construct mine shafts....

Q:

Why is it advantageous for a cell to have organelles? Discuss this concept from the standpoint of thermodynamics.

Q:

How would the current and quick ratios of a service business compare?

Q:

How would the current and quick ratios of a service business compare?

Q:

How would the current and quick ratios of a service business compare?

Q:

Frank is an option speculator. He anticipates the Danish kroner to appreciate from its current level of $.19 to $.21. Currently, kroner call options are available with an exercise price of $.18 and a...

Q:

A 30-year Treasury bond is issued with face value of $1,000, paying interest of $70 per year. If market yields increase shortly after the T-bond is issued, what is the bond%u2019s coupon rate? (Round...

Q:

What is the critical value for level of significance and table parameters in the data below? Level of Significance 0.025 Number of Rows Number of Columns