Which of the following results in an increase in the return on assets ratio?
A)A decrease in the asset turnover ratio.
B)An increase in the net profit margin ratio.
C)Purchasing a building by signing a long-term mortgage payable.
D)Using cash to purchase land.

Question

Quizplus · Accepted Answer

Return on assets is net income divided by average total assets or net profit margin ratio times asset turnover ratio. An increase in the net profit margin ratio therefore increases return on assets.

Which of the Following Results in an Increase in the Return