The financial ratio measured as net income divided by total assets is known as the firm's:
A) profit margin.
B) return on assets.
C) return on equity.
D) asset turnover.
E) earnings before interest and taxes.

Question

Quizplus · Accepted Answer

Return on assets (ROA) is calculated as net income divided by total assets, representing the percentage of profit a company generates from its assets. This ratio provides insight into the company's efficiency in managing its assets to generate profits.

The Financial Ratio Measured as Net Income Divided by Total