The return on assets ratio is the product of the profit margin and asset utilization.

Name: The return on assets ratio is the product of the profit margin and asset utilization.
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Question

Quizplus · Accepted Answer

The return on assets (ROA) ratio is indeed calculated as the product of the profit margin (net income divided by sales) and asset utilization (sales divided by total assets), reflecting how efficiently a company uses its assets to generate profit.

The Return on Assets Ratio Is the Product of the Profit