Which of the following statements is correct ? All other things being equal, if

Question

Which of the following statements is correct?

All other things being equal, if return on equity increases, the return on assets must have also increased.

All other things being equal, the more efficiently a company utilizes its assets, the greater will be its return on investment.

All other things being equal, if the gross margin decreases, the inventory turnover must have increased.

All other things being equal, if the number of days inventory held increases, the return on assets will increase.

All other things being equal, if return on equity increases, the return on assets must have also increased.

All other things being equal, the more efficiently a company utilizes its assets, the greater will be its return on investment.

All other things being equal, if the gross margin decreases, the inventory turnover must have increased.

All other things being equal, if the number of days inventory held increases, the return on assets will increase.

Explanation / Answer

Correct Option is "B"

All other things being equal the more efficiently a company utilizes its assets , the greater will be its return on investment

as per the utilization of assets the investement value depend on return on assets these ratio indicate the return on investment earn by company using the assets properly....

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