Which of the following ratios measures the earnings of a company on each dollar of assets invested?
A)Return on assets
B)Return on sales
C)Return on equity
D)Current ratio

Question

Quizplus · Accepted Answer

Return on assets (ROA) measures a company's ability to generate earnings from its assets. It is calculated by dividing the net income by the total assets of the company. ROA provides an indication of how efficiently a company is using its assets to generate profits.

Which of the Following Ratios Measures the Earnings of a Company