The return on net worth ratio is based on a retailer's _____.
A)net profit,fixed assets,and fixed liabilities
B)net profit,current assets,and current liabilities
C)net profit,net sales,total assets,and net worth
D)net profit,total assets,net sales,and net liabilities

Question

Quizplus · Accepted Answer

The return on net worth ratio is calculated by dividing the net profit by net worth. Net profit is the amount left over after all expenses have been deducted from net sales, which is included in Option C. Total assets are also included in Option C, but fixed liabilities and fixed assets (Option A) or current assets and current liabilities (Option B) are not relevant to this ratio. Similarly, net liabilities are not part of the calculation for the return on net worth ratio.

The Return on Net Worth Ratio Is Based on a Retailer's