The return on total assets measures the profitability of total assets, without considering how the assets are financed.

Question

Quizplus · Accepted Answer

The return on total assets is calculated by dividing net income by total assets, and it indicates how efficiently a company is using its assets to generate profits. This ratio does not take into account how the assets were financed (through debt or equity), and therefore provides a measure of overall profitability regardless of the capital structure of the company.

The Return on Total Assets Measures the Profitability of Total