Return on stockholders' equity is equal to ____ times ____ times ____.
A) net profit margin; fixed asset turnover; equity multiplier
B) gross profit margin; total asset turnover; equity multiplier
C) net profit margin; total asset turnover; equity multiplier
D) net profit margin; total asset turnover; debt-to-equity ratio

Question

Quizplus · Accepted Answer

Return on stockholders' equity is calculated by multiplying net profit margin, which is the percentage of each dollar of revenue that results in net profit, with total asset turnover, which measures a company's efficiency at using its assets to generate revenue, and equity multiplier, which measures the amount of debt a company has relative to equity. Therefore, the correct option is C) net profit margin; total asset turnover; equity multiplier.

Return on Stockholders' Equity Is Equal to ____ Times ____

Return on Stockholders' Equity Is Equal to Times