If a firm has positive net income, a decrease in a venture's asset intensity ratio will increase its ROE.

Question

Quizplus · Accepted Answer

A decrease in asset intensity ratio means that the firm is using fewer assets to generate the same level of revenue, which indicates increased efficiency. This, in turn, increases the return on equity (ROE) of the venture. If the firm already has a positive net income, the increase in ROE will further enhance shareholder value.

If a Firm Has Positive Net Income, a Decrease in a Venture's