Both profit margin and asset turnover affect a company's return on assets.

Question

Quizplus · Accepted Answer

Profit margin and asset turnover both play a role in determining a company's return on assets. Profit margin measures the amount of profit a company is able to generate for each dollar of sales, while asset turnover measures how efficiently a company is using its assets to generate revenue. A combination of a high profit margin and a high asset turnover will result in a higher return on assets.

Both Profit Margin and Asset Turnover Affect a Company's Return