Service quality affects customer retention and profit in the numerator and accounts receivable in the denominator of the return on assets equation.

Question

Quizplus · Accepted Answer

This is true since service quality directly impacts customer retention and therefore, contributes to increased profit in the numerator of the return on assets equation. On the other hand, poor service quality can lead to delayed payments or bad debts, which can negatively affect accounts receivable in the denominator of the same equation.

Service Quality Affects Customer Retention and Profit in the Numerator