Operating ROA can be found as the product of ________.
A)Return on sales x ATO
B)Tax burden x Interest burden
C)Interest burden x Leverage ratio
D)ROE x Dividend payout ratio

Question

Quizplus · Accepted Answer

Operating ROA (Return on Assets) measures a company's ability to generate profits from its available assets. Return on Sales (ROS) measures a company's profitability based on its sales, while Asset Turnover Ratio (ATO) measures how efficiently a company is utilizing its assets to generate revenue. Therefore, Operating ROA can be calculated by multiplying Return on Sales (ROS) with Asset Turnover Ratio (ATO).

Operating ROA Can Be Found as the Product of ________