Which of the following statements about ROA is true?
A) ROA is the most important ratio for an equity investor.
B) ROA refiects the risk inherent in a company.
C) ROA is useful for determining how the company financed its assets.
D) ROA is useful for comparing companies in different industries.

Question

Quizplus · Accepted Answer

ROA (Return on Assets) is a financial ratio that indicates how profitable a company is relative to its total assets. It is useful for comparing the efficiency of different companies in generating earnings from their assets, regardless of the industry. This makes it a versatile metric for comparison across different sectors.

Which of the Following Statements About ROA Is True