ROA measures how capably the management of a financial institution has been converting the institution's assets into net earnings.

Question

Quizplus · Accepted Answer

This is a correct statement. Return on assets (ROA) is a financial ratio that measures how efficiently a company is using its assets to generate earnings. A higher ROA indicates that the management of the financial institution is generating more profits from the same amount of assets.

ROA Measures How Capably the Management of a Financial Institution