Both the Profit Margin Ratio and the Asset Turnover Ratio

question 130

True/False

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

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Definitions:

Expenses Incurred

Costs that have been realized during the course of a business operation or activity.

Net Income

The amount of money remaining after all operating expenses, taxes, and interest have been deducted from total revenue.

Sales

The process of exchanging a product or service for monetary value, typically in a business setting.

Return on Equity

A financial ratio that measures the profitability of a corporation in relation to stockholders’ equity, indicating how well a company uses investment funds to generate earnings growth.