This ratio measures the overall return on the firm's assets inclusive of financial leverage and taxes.
A) ROA
B) ROE
C) Basic earning power
D) Profit margin

Question

Quizplus · Accepted Answer

The ratio that measures the overall return on the firm's assets inclusive of financial leverage and taxes is Return on Assets (ROA). It shows the efficiency of a company in using its assets to generate profits, regardless of how the company is financed or taxed. It is calculated by dividing net income by total assets.

This Ratio Measures the Overall Return on the Firm's Assets