If you multiply sales profit margin by asset turnover,you obtain:
A) A meaningless number
B) A metric that describes the profit generation efficiency of new assets
C) Return on assets
D) Return on shareholders equity

Question

Quizplus · Accepted Answer

Multiplying sales profit margin (profit/sales) by asset turnover (sales/assets) results in the formula for return on assets (ROA): profit/assets. This measures the efficiency with which a company is using its assets to generate profits.

If You Multiply Sales Profit Margin by Asset Turnover,you Obtain