The fiNancial Ratio Measured as Net Income Divided by Total

question 325

Multiple Choice

The financial ratio measured as net income divided by total assets is known as the firm's:

• A) Profit margin.
• B) Return on assets.
• C) Return on equity.
• D) Asset turnover.
• E) Earnings before interest and taxes (EBIT).

---

Definitions:

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time, providing a snapshot of its financial condition.

Sarbanes-Oxley Act

The Sarbanes-Oxley Act is a U.S. federal law enacted in 2002 to protect investors by improving the accuracy and reliability of corporate disclosures.

Auditing Services

Professional services provided by accountants or auditors to examine and verify a company's financial statements and other financial info to ensure accuracy and compliance with accounting standards and regulations.

Registered Public Accounting Firm

This refers to an accounting firm registered with the Public Company Accounting Oversight Board (PCAOB), authorized to audit public companies.