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    • Question

      Which metric is commonly used to evaluate a company’s

      operational efficiency?
      A Price/Earnings ratio Correct Answer Incorrect Answer
      B Operating ratio (Operating expenses / Net sales) or Asset turnover Correct Answer Incorrect Answer
      C Debt/equity ratio only Correct Answer Incorrect Answer
      D Cash conversion cycle only Correct Answer Incorrect Answer
      E Dividend payout ratio only Correct Answer Incorrect Answer

      Solution

      Operating ratio and asset turnover measure operational efficiency.

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