Outdoor Gear reduced its general and administrative costs this year.This cost improvement will increase which of the following ratios?
I.Profit margin
II.Return on assets
III.Total asset turnover
IV.Return on equity

Question

Quizplus · Accepted Answer

Reducing general and administrative costs increases net income, which improves the profit margin (I), return on assets (II), and return on equity (IV). Total asset turnover (III) is not directly affected by cost reductions.

Outdoor Gear Reduced Its General and Administrative Costs This Year