Which ratio measures the operating return on the firm's assets irrespective of financial leverage and taxes?
A) basic earning power ratio
B) profit margin
C) return on assets
D) operating leverage return

Question

Quizplus · Accepted Answer

The basic earning power (BEP) ratio measures the operating return on the firm's assets without considering the effects of taxes and financial leverage, focusing solely on the firm's ability to generate earnings from its operations relative to its assets.

Which Ratio Measures the Operating Return on the Firm's Assets