Which of the following statements about the use of ROAM (return on assets managed)is True?
A)ROAM is a highly subjective measure
B)The goal of ROAM is to reach an optimal level of investment
C)Sales managers have eagerly adopted ROAM as a measure of effectiveness
D)ROAM is calculated using contribution margin and asset liquidity
E)ROAM cannot be used as a control device

Question

Quizplus · Accepted Answer

The goal of ROAM is to reach an optimal level of investment. This measure helps in determining the value generated by the assets managed by a company, and the goal is to achieve the highest possible return on these assets while minimizing the associated risks. Therefore, option B is the correct statement about ROAM. Option A is incorrect because ROAM is based on objective financial data. Option C is incorrect as ROAM is not typically used as a measure of effectiveness for sales managers. Option D is incorrect because ROAM is calculated by dividing net profit by total assets. Option E is incorrect because ROAM can be used as a control device to measure business performance.

Which of the Following Statements About the Use of ROAM