When comparing two companies,what kind of information does a company's rate of return on total assets provide?
A)How effectively each company uses leverage to finance its business
B)How much profit each company generates with each dollar of sales
C)How effectively a company collects cash on credit sales
D)How effectively each company uses assets to generate profits

Question

Quizplus · Accepted Answer

A company's rate of return on total assets provides information on how effectively each company uses its assets to generate profits. This ratio shows the company's ability to generate earnings through its use of assets, making it a valuable indicator of efficiency and profitability. It does not provide information on leverage or cash collection.

When Comparing Two Companies,what Kind of Information Does a Company's