Both the proﬁt margin ratio and the asset turnover ratio affect a company's return on assets.

Name: Both the proﬁt margin ratio and the asset turnover ratio affect a company's return on assets.
Brand: Quizplus
Rating: 4.9 (31 reviews)

Question

Quizplus · Accepted Answer

The return on assets ratio is calculated by multiplying the profit margin ratio (net income divided by total assets) and the asset turnover ratio (total revenue divided by total assets). Therefore, both ratios have an impact on the final return on assets ratio.

Both the Proﬁt Margin Ratio and the Asset Turnover Ratio