Return on total assets measures a company's ability to:
A)Produce net income from net sales.
B)Produce sales from net assets.
C)Produce net income from net assets.
D)Increase its asset base from sales.
E)Increase its asset base from net income.

Question

Quizplus · Accepted Answer

Return on total assets measures a company's ability to generate net income from its total assets. This ratio is calculated by dividing net income by total assets. It indicates the efficiency with which a company uses its assets to generate profits. A higher return on total assets means that the company is more efficient in generating profit from its asset base.

Return on Total Assets Measures a Company's Ability To