Which of the following results in an increase in the return on assets ratio?
A)A decrease in the total asset turnover ratio.
B)An increase in the net profit margin ratio.
C)Purchasing a building by signing a long-term mortgage payable.
D)Using cash to purchase land.

Question

Quizplus · Accepted Answer

An increase in the net profit margin ratio (which is calculated as net profit divided by total revenue) will result in an increase in the return on assets ratio. The return on assets ratio is calculated as net profit divided by total assets. The other options would result in a decrease in the return on assets ratio.

Which of the Following Results in an Increase in the Return