(CMA adapted, Jun 90 #21) Regarding the information for Ramer Company and Matson Company, assume that some of the ratios and data for Ramer and Matson are affected by income taxes.Assuming no interperiod income tax allocation, which of the following items would be directly affected by income taxes for the period?
A)debt-equity ratio and dividend payout ratio
B)current ratio and debt-equity ratio
C)return on investment and earnings per share
D)interest coverage ratio and current ratio
E)none of the above

Question

Quizplus · Accepted Answer

Return on investment (ROI) and earnings per share (EPS) are directly affected by income taxes because both are calculated based on net income, which is after the effect of income taxes.

(CMA Adapted, Jun 90 #21) Regarding the Information for Ramer