The return on assets (ROA)measure for a retailer is comprised of ________.
A) gross profit and operating expenses
B) asset turnover and net profit margin
C) gross margin return on inventory (GMROI) and inventory turnover
D) net profit and investment intensity

Question

Quizplus · Accepted Answer

ROA is a measure of how efficiently a company is using its assets to generate profit. It is calculated by dividing net income by total assets. Net profit margin (net income divided by total revenue) measures how much of every dollar of revenue is actually profit, while asset turnover measures how efficiently a company is using its assets to generate revenue. Therefore, ROA is comprised of these two factors: net profit margin and asset turnover.

The Return on Assets (ROA)measure for a Retailer Is Comprised