The return on assets ratio
A)considers the investment made by all creditors and stockholders.
B)is a measure of the liquidity of a company.
C)is based on average stockholders' equity as compared to net income for the period.
D)reflects investments made only by the creditors of a company.

Question

Quizplus · Accepted Answer

The return on assets (ROA) ratio considers the investment made by all creditors and stockholders because it measures a company's net income relative to its total assets, which are financed both by debt (creditors) and equity (stockholders).

The Return on Assets Ratio