Return on assets is an activity ratio that is a percentage representing what a company earned from its assets.

Question

Quizplus · Accepted Answer

Return on assets (ROA) is a profitability ratio that measures how efficiently a company uses its assets to generate profit, not an activity ratio. Activity ratios, also known as turnover ratios or efficiency ratios, measure how effectively a company uses its assets to generate sales or revenue.

Return on Assets Is an Activity Ratio That Is a Percentage