If a retailer has a return on assets of 15 percent and a net profit margin of 3 percent,then its rate of asset turnover is:

Question

Quizplus · Accepted Answer

Return on assets (ROA) = Net profit margin x Asset turnover

Given, ROA = 15% and net profit margin = 3%, we can calculate the asset turnover as:

Asset turnover = ROA / net profit margin
              = 15% / 3%
              = 5 times
              
Therefore, the retailer's rate of asset turnover is 5.0 times.

If a Retailer Has a Return on Assets of 15