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Stocks 305: Quantifying Competitive Advantages

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1.
What does a company's turnover ratio measure?
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How efficiently the company uses its assets to generate sales.
2.
There are three main types of profit margins used by companies. Which of the following is not one of them?
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Capital margin. This is not one of the margins used.
3.
If a company's ROIC (return on invested capital) exceeds _______ for a several years, it most likely has an economic moat.
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15%. Provided that it occurs for a number of years, this figure suggests a moat.
4.
Which of the following is an example of a non-interest-bearing current liability?
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Accounts payable. Accounts payable are the most common non-interest-bearing liability. Short-term debt bears interest, while accounts receivable is an asset.
5.
Which of the following measures will not affect return on assets (ROA)?
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Asset/equity ratio. The asset/equity ratio will affect return on equity (ROE), not ROA.