A low ROA suggests that management is capable of generating large profits with relativiely small investments.

Question

Quizplus · Accepted Answer

A low ROA indicates that the management is not effectively utilizing the assets to generate profits, and thus, the investments made are not yielding adequate returns. It means that the profits generated are not significant concerning the amount invested, suggesting that the management is not efficient in making profitable investments.

A Low ROA Suggests That Management Is Capable of Generating