When comparing two companies, what kind of information does a company's rate of return on total assets provide?
A) How much profit each company generates with each dollar of sales
B) How effectively each company uses leverage to finance its business
C) How effectively each company uses assets to generate profits
D) How effectively a company collects cash on credit sales

Question

Quizplus · Accepted Answer

A company's rate of return on total assets measures how effectively a company uses its assets to generate profits, so it provides information on the efficiency of asset management.

When Comparing Two Companies, What Kind of Information Does a Company's