Return on net worth equals return on assets times _____.
A)profit margin
B)cost of goods sold
C)asset turnover
D)financial leverage

Question

Quizplus · Accepted Answer

The formula for return on net worth is return on assets times financial leverage. Financial leverage is the ratio of total assets to net worth, and therefore plays a critical role in determining the return on net worth. The other options (A, B, and C) are not directly related to the calculation of return on net worth.

Return on Net Worth Equals Return on Assets Times _____