Select the correct statement from the following:
A) Profit margin reflects a company's ability to produce net sales from total assets.
B) Total asset turnover reflects the percent of net income in each dollar of net sales.
C) Return on total assets can be separated into gross margin ratio and price-earnings ratio.
D) High returns on total assets are desirable.
E) Return on total assets analysis is beneficial in evaluating a company but is not useful for competitor analysis.

Question

Quizplus · Accepted Answer

High returns on total assets indicate that a company is efficiently using its assets to generate profits, making it a desirable characteristic for investors and stakeholders.

Select the Correct Statement from the Following