The return on assets ratio is affected by the
A)profit margin and debt to total assets ratios.
B)profit margin and asset turnover ratios.
C)times interest earned and debt to total assets ratios.
D)profit margin and free cash flow.

Question

Quizplus · Accepted Answer

The return on assets (ROA) ratio is affected by the profit margin (which indicates how much profit a company makes for every dollar of sales) and the asset turnover ratio (which shows how efficiently a company uses its assets to generate sales). These two factors together determine how effectively a company is using its assets to generate profits.

The Return on Assets Ratio Is Affected by the