Companies that have low net operating profit margins generally only earn a reasonable return on net operating assets if they can utilize their net operating assets very efficiently.

Question

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Companies with low net operating profit margins have lower profitability and can only earn a reasonable return on net operating assets if they utilize their assets efficiently. This is because they earn less revenue per dollar of asset invested, so they need to make up for it by using those assets more efficiently.

Companies That Have Low Net Operating Profit Margins Generally Only