Profitability ratios such as _____ can be used to analyze and assess a company's financial performance.

Question

Quizplus · Accepted Answer

Return on assets (ROA) is a profitability ratio that measures how efficiently a company uses its assets to generate profits. This ratio can help assess the financial performance of a company by comparing its net income to the total value of its assets. Higher ROA indicates that the company is generating more profits with its assets and is more efficient in its operations. Therefore, ROA is a valuable tool for investors, lenders, and analysts to evaluate the financial health of a company.

Profitability Ratios Such as _____ Can Be Used to Analyze