Select the correct statement from the following:
A)Profit margin reflects a company's ability to produce net sales from total assets.
B)Total asset turnover reflects the percent of net income in each dollar of net sales.
C)Return on total assets can be separated into the gross margin ratio and debt ratio.
D)A high return on total assets is desirable.
E)Analysis of return on total assets is not beneficial in evaluating profitability.

Question

Quizplus · Accepted Answer

A high return on total assets is a desirable outcome for a company as it indicates efficient utilization of assets to generate profits. It shows how much profit a company has earned for every dollar invested in assets.

Select the Correct Statement from the Following