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1.
Which of the following ROAs (return on assets) suggests that a company has an economic moat?
20%. If a company has generated ROAs in excess of 10%, the company may indeed possess such a moat.
2.
Which expenses are not subtracted from sales when calculating NOPAT (net operating profit, after taxes)?
Interest. Interest expenses are not subtracted from operating profit when calculating NOPAT. Taxes (the "AT" in NOPAT) obviously are, while COGS are subtracted from sales to get to operating profit.
3.
What does a company's turnover ratio measure?
How efficiently the company uses its assets to generate sales.
4.
Which of the following measures will not affect return on assets (ROA)?
Asset/equity ratio. The asset/equity ratio will affect return on equity (ROE), not ROA.
5.
There are three main types of profit margins used by companies. Which of the following is not one of them?
Capital margin. This is not one of the margins used.
