Price-earnings ratios tend to be high for fast-growing firms.

Question

Quizplus · Accepted Answer

A) ROA = (Net income + Interest Expense) / Total assets
This is a little tricky in that Total Assets are not given in the problem. The student must remember the basic balance sheet equation 11ea84dc_f589_2a6f_9a63_0bbb2b463592_TB1316_00_TB1316_00 Total Liabilities and Shareholders' Equity is given and this is the same as Total Assets. So, 11ea84dc_f589_2a70_9a63_4bf4de99ad35_TB1316_00_TB1316_00

Price-Earnings Ratios Tend to Be High for Fast-Growing Firms