Return on assets can be calculated as profit margin times asset turnover.

Name: Return on assets can be calculated as profit margin times asset turnover.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Return on assets (ROA) is calculated as net income divided by total assets. Net income can be broken down into profit margin (net income divided by total revenue) and asset turnover (total revenue divided by total assets). Therefore, ROA can be calculated as profit margin times asset turnover.

Return on Assets Can Be Calculated as Profit Margin Times