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Which One of the Following Is Not True Concerning Return

Question 20

Multiple Choice

Which one of the following is not true concerning return on net operating assets?


A) An infinite number of combinations of net operating profit margin and net operating asset turnover will yield a given RNOA
B) When comparing companies in different industries, a higher profit margin always indicates which company has better management performance
C) In industries with relatively low operating asset turnover, a higher profit margin must be maintained to achieve sufficient RNOA
D) When analyzing conglomerates, analysts use a weighted average of margin and turnover rates to look at RNOA

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