Which ratio measures the operating return on the firm's assets irrespective of financial leverage and taxes?
A) Basic earning power ratio
B) Profit margin
C) Return on Assets
D) Operating Leverage Return

Question

Quizplus · Accepted Answer

The basic earning power ratio measures the operating return on the firm's assets irrespective of financial leverage and taxes. It is calculated by dividing earnings before interest and taxes (EBIT) by total assets.

Which Ratio Measures the Operating Return on the Firm's Assets