Foreign companies listed on U.S.stock exchanges must reconcile their net income and stockholders' equity to U.S.GAAP.Which ratios can be calculated with the information provided in this reconciliation?
A)Operating profit margin
B)Asset turnover
C)Return on equity
D)Current ratio

Question

Quizplus · Accepted Answer

The reconciliation of net income and stockholders' equity to U.S. GAAP provides the necessary information to calculate the return on equity ratio, which measures the profitability of a company by comparing its net income to its stockholders' equity. The other ratios listed require information on specific assets, liabilities or revenues, which cannot be obtained solely from the reconciliation. Therefore, C is the best choice.

Foreign Companies Listed on U