What is its return on shareholders funds

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Q1. A firm has average total assets of $800,000 and average total liabilities of $200,000. If profit after tax is $120,000, what is its return on shareholders' funds?

A. 8%

B. 9%

C. 20%

D. 12.5%

Q2. An analysis of the 2018 and 2019 profitability of Coronation Ltd showed that its gross profit margin increased, but operating profit margin decreased. Which of the following situations could explain the changes in the profitability ratios?

A. Selling price increased, cost of sales decreased and operating expenses decreased

B. Selling prices increased, no change in cost of sales and no change in operating expenses.

C. Selling price increased, cost of sales decreased and operating expenses increased

D. No change in selling prices, cost of sales decreased and no change in operating expenses

Reference no: EM132701900

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