Return on assets cannot fall under which of the following circumstances? $$\begin{array} { l l l }
& \text { Net Profit Margin } & \text { Total Asset Turnover } \
\text { I. } & \text { decline } & \text { rise } \
\text { II. } & \text { rise } & \text { decline } \
\text { III. } & \text { rise } & \text { rise } \
\text { IV. } & \text { decline } & \text { decline }
\end{array}$$
A)I
B)II
C)III
D)IV
E)The ratio could fall under all of the answers.

Question

Return on assets cannot fall under which of the following circumstances? $$\begin{array} { l l l } 
& \text { Net Profit Margin } & \text { Total Asset Turnover } \
\text { I. } & \text { decline } & \text { rise } \
\text { II. } & \text { rise } & \text { decline } \
\text { III. } & \text { rise } & \text { rise } \
\text { IV. } & \text { decline } & \text { decline }
\end{array}$$
A)I
B)II
C)III
D)IV
E)The ratio could fall under all of the answers.

Quizplus · Accepted Answer

Return on assets (ROA) is calculated as Net Profit Margin multiplied by Total Asset Turnover. If both components rise, ROA cannot fall.

Return on Assets Cannot Fall Under Which of the Following