Return on total assets is the product of
A)interest rates and pre-tax profits.
B)the debt-equity ratio and P/E ratio.
C)the after-tax profit margin and the asset turnover ratio.
D)sales and fixed assets.

Question

Quizplus · Accepted Answer

Return on total assets is calculated by multiplying two metrics - the after-tax profit margin (net income divided by total revenue) and the asset turnover ratio (total revenue divided by total assets). Therefore, the correct answer is C - the after-tax profit margin and the asset turnover ratio.

Return on Total Assets Is the Product of