Both the Profit Margin Ratio and the Asset Turnover Ratio

question 5

True/False

Both the profit margin ratio and the asset turnover ratio affect a company's return on assets.

---

Definitions:

Industry

The organized economic activity connected with the production, manufacture, or construction of goods and services.

Automobile Insurance Costs

The expenses related to insuring a car against accidents, theft, and other risks.

Economies of Scale

Cost advantages reaped by companies when production becomes efficient, as the cost per unit of output decreases with increasing scale.

Long-Run Average Cost Curve

A graphical representation that shows the lowest average cost at which a firm can produce any given level of output in the long run, when all inputs are variable.