Return on assets cannot fall under which of the following circumstances?
$\begin{array} { l l }
&\underline{\text { Net Profit Margin} } &\underline{ \text { Tatal Asset Tunover} } \
\text { I.}&\text { decline } & \text { rise } \
\text {II.} &\text { rise } & \text { decline } \
\text { III.}&\text { rise } & \text { rise } \
\text { IV.}&\text { decline } & \text { decline }
\end{array}$
A)I
B)II
C)III
D)IV
E)The ratio could fall under all of the answers.

Question

Return on assets cannot fall under which of the following circumstances?
$\begin{array} { l l } 
&\underline{\text { Net Profit Margin} } &\underline{ \text { Tatal Asset Tunover} } \
\text { I.}&\text { decline } & \text { rise } \
\text {II.} &\text { rise } & \text { decline } \
\text { III.}&\text { rise } & \text { rise } \
\text { IV.}&\text { decline } & \text { decline }
\end{array}$
A)I
B)II
C)III
D)IV
E)The ratio could fall under all of the answers.

Quizplus · Accepted Answer

Return on Assets (ROA) is calculated as Net Profit Margin multiplied by Total Asset Turnover. If both the Net Profit Margin and Total Asset Turnover rise, ROA will increase, not fall.

Return on Assets Cannot Fall Under Which of the Following