Both the profit margin ratio and the asset turnover ratio affect a company's return on assets.

Question

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The return on assets (ROA) is influenced by both the profit margin ratio (which measures how much out of every dollar of sales a company actually keeps in earnings) and the asset turnover ratio (which measures a company's efficiency in using its assets to generate sales). Together, they determine how effectively a company uses its assets to generate profit.

Both the Profit Margin Ratio and the Asset Turnover Ratio