11. If the CEO of Kentucky Fried Panda was filling out a fitness report on a div

Question

11. If the CEO of Kentucky Fried Panda was filling out a fitness report on a division manager (i.e., "grading" the manager), which of the following situations would be likely to cause the manager to receive a better grade? In all cases, assume that other things are held constant.

a. The division's DSO (days' sales outstanding) is 40,where as the average for its competitors is 30.

b. The division's return on net operating assets (RNOA) is above the average of other firms in its industry.

c. The division's total assets turnover ratio is below the average for other firms in its industry.

d. The division's debt ratio is above the average for other firms in the industry.

e. The division's inventory turnover is 6, whereas the average inventory turnover for its competitors is 8.

Explanation / Answer

The division's return on net operating assets (RNOA) is above the average of other firms in its industry. Option B is correct

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