A company's return on assets will always equal or exceed its profit margin.

Question

Quizplus · Accepted Answer

Return on assets (ROA) and profit margin are different financial metrics. Profit margin measures how much out of every dollar of sales a company actually keeps in earnings, while ROA indicates how efficiently a company's management is using its assets to generate earnings. A company's profit margin does not necessarily equal or exceed its ROA, as they are calculated differently and represent different aspects of financial health.

A Company's Return on Assets Will Always Equal or Exceed