Return on Assets (ROA)can be broken down into these two components: profit margin and
A)asset utilization margin.
B)asset turnover.
C)common earnings leverage.
D)financial structure leverage.

Question

Quizplus · Accepted Answer

Return on assets (ROA) is calculated by dividing net income by average total assets. It can then be broken down into two components: profit margin and asset turnover. Asset turnover is a measure of how efficiently a company is using its assets to generate revenue, and is calculated by dividing revenue by average total assets. Therefore, the correct answer is B - asset turnover.

Return on Assets (ROA)can Be Broken Down into These Two