1. Which ratio below would give the best sense of the overall efficiency of the firm?
Current Ratio
Total Debt to Total Assets
Total Asset Turnover (TATO)
Inventory Turnover
Fixed Asset Turnover
2. What are the three "levers" for Return on Equity? That is, what three ratios can be used to calculate return on equity?
profit margin, total asset turnover and equity multiplier
profit margin, debt ratio and return on assets
inventory turnover, debt to equity and leverage
profitability, efficiency and market value ratios