To Assess Whether or Not a Firm Is Earning an Adequate

Multiple Choice

To assess whether or not a firm is earning an adequate rate of profit,return on capital employed (ROCE) is a better indicator than return on sales because:

A) Sales are more variable than capital employed
B) Return on sales varies between industries according to their capital intensity
C) A firm's return on sales depends upon the choice between gross margin,operating margin,and net margin
D) ROCE is based upon cash flow