Operating ROA is calculated as ________, while ROE is calculated as ________.
A) EBIT/total assets; net profit/total assets
B) net profit/total assets; EBIT/total assets
C) EBIT/total assets; net profit/equity
D) net profit/EBIT; sales/total assets

Question

Quizplus · Accepted Answer

Operating ROA is calculated as EBIT/total assets, while ROE is calculated as net profit/equity. Option A and B are reversed in their calculation of Operating ROA and ROE. Option D is incorrect as it uses net profit/EBIT instead of net profit/equity for ROE.

Operating ROA Is Calculated as ________, While ROE Is Calculated