If a company wants to increase its return on assets, it should not
A) increase the profit margin.
B) increase the asset turnover.
C) decrease average total assets.
D) increase average total assets.

Question

Quizplus · Accepted Answer

Increasing average total assets without a proportional increase in net income or sales will decrease the return on assets, as it dilutes the effect of profits over a larger asset base.

If a Company Wants to Increase Its Return on Assets