Which of the following statements is correct with respect to the return on assets ratio?
A) Return on assets is a measure of liquidity.
B) Calculated by dividing net sales by average total assets.
C) Indicates the amount of net sales generated by each dollar invested in assets.
D) A high return on assets indicates a profitable company.

Question

Quizplus · Accepted Answer

Return on assets (ROA) measures how efficiently a company uses its assets to generate profit, so a high ROA indicates a profitable company.

Which of the Following Statements Is Correct with Respect to the Return