These are sample practice MCQs created for exam preparation. These are NOT official exam questions.
PROFITABILITY ANALYSIS: What is the company Return on Assets (ROA)? (1) Net income was $2.8M and average total assets were $35M (2) Profit margin is 14% and asset turnover is 0.571
Question:
PROFITABILITY ANALYSIS: What is the company Return on Assets (ROA)? (1) Net income was $2.8M and average total assets were $35M (2) Profit margin is 14% and asset turnover is 0.571
PROFITABILITY ANALYSIS: What is the company Return on Assets (ROA)? (1) Net income was $2.8M and average total assets were $35M (2) Profit margin is 14% and asset turnover is 0.571
Options
Answer: (D) EACH statement ALONE is sufficient
Explanation:
Statement (1): ROA = Net Income/Total Assets = $2.8M/$35M = 8%. Sufficient. Statement (2): ROA = Profit Margin × Asset Turnover = 0.14 × 0.571 = 8%. Sufficient.
Explanation:
Statement (1): ROA = Net Income/Total Assets = $2.8M/$35M = 8%. Sufficient. Statement (2): ROA = Profit Margin × Asset Turnover = 0.14 × 0.571 = 8%. Sufficient.
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