Which factor does not explain differences or changes in ROA?
A) Operating leverage
B) Cyclicality of sales
C) Product life cycle
D) Financial leverage

Name: Which factor does not explain differences or changes in ROA? A) Operating leverage B) Cyclicality of sales C) Product life cycle D) Financial leverage
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Question

Quizplus · Accepted Answer

Financial leverage affects ROE, not ROA, as it involves the use of debt to finance assets, impacting equity returns rather than asset returns.

Which Factor Does Not Explain Differences or Changes in ROA