If a company's ratio of net income to net sales (generally referred to as profit margin)is low, then return on investment will be low.

Question

Quizplus · Accepted Answer

A low profit margin does not necessarily result in a low return on investment (ROI). ROI is influenced by multiple factors including asset turnover and leverage, not just profit margins. A company can have a low profit margin but still achieve a high ROI if it efficiently utilizes its assets or leverages its operations effectively.

If a Company's Ratio of Net Income to Net Sales