Indicate whether each of the following statements about financial statement analysis is true or false.________ a)The ratio, plant assets to long-term liabilities, is a measure of a company's ability to obtain additional long-term financing.________ b)Generally, a company's current assets should be purchased using long-term financing such as bonds payable.________ c)Ratios that measure a company's profitability provide some measure of the effectiveness of the company's management.________ d)Net margin indicates the amount remaining from each sales dollar after cost of goods sold has been subtracted out.________ e)Net margin is also sometimes called the return on assets ratio.

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b)False c)True d)False e)Fa)Plant assets to long-term liabilities shows the amount of assets per each dollar of long-term debt.b)A company's current assets should be purchased using short- term liabilities. Long-lived assets should be financed with long-term liabilities.c)Profitability measures gauge what percentage of sales result in earnings and how productive assets are in generating those sales. Therefore, profitability ratios provide some indication of management's effectiveness.d)Net margin, sometimes called operating margin, profit margin, or return-on-sales ratio, describes the percentage of each sales dollar remaining after subtracting other expenses, as well as cost of goods sold.e)Net margin is sometimes called operating margin, profit margin, or return-on-sales ratio. It is not called return on assets. Return on assets is the ratio of wealth generated (net income)to the amount invested (average total assets)to generate the wealth. Return on assets is also called return on investment or earning power.

Indicate Whether Each of the Following Statements About Financial Statement