A firm's return on stockholders' equity is a function of its net profit margin, ____, and equity multiplier.
A) current ratio
B) cost of goods
C) total asset turnover
D) fixed asset turnover

Question

Quizplus · Accepted Answer

Return on stockholders' equity can be calculated by multiplying the net profit margin by the total asset turnover and the equity multiplier. Therefore, the missing factor in the given options is total asset turnover.

A Firm's Return on Stockholders' Equity Is a Function of Its