The cash flow on total assets ratio:
A)Is the same as return on assets.
B)Is the same as profit margin.
C)Can measure a company's ability to meet its obligations.
D)Is highly affected by accounting principles of income recognition and measurement.
E)Is average net assets divided by cash flows from operations.

Question

Quizplus · Accepted Answer

The cash flow on total assets ratio measures a company's ability to meet its obligations using cash flows from operations, and is not influenced by income recognition or measurement accounting principles. It is not the same as return on assets or profit margin, and is not calculated by dividing average net assets by cash flows from operations.

The Cash Flow on Total Assets Ratio