When calculating the return on assets, you should use average total assets.

Name: When calculating the return on assets, you should use average total assets.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

When calculating the return on assets (ROA), it is recommended to use the average total assets over the period being analyzed to get a more accurate picture of how efficiently a company is utilizing its assets. Using just the ending balance of total assets can skew the calculation if there were large fluctuations in assets during the period.

When Calculating the Return on Assets, You Should Use Average