Return on Assets Measures How Profitably Management Has Used Its

question 123

True/False

Return on assets measures how profitably management has used its assets.

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Definitions:

Return On Total Assets

A profitability ratio that measures the net income produced by the total assets within a company over a period, indicating how effectively a company uses its assets to generate profit.

Times Interest Earned

A financial ratio that measures a company's ability to meet its interest payments on outstanding debt with its earnings before interest and taxes.

Total Asset Turnover

A financial ratio that measures a company's efficiency in using its assets to generate sales or revenue; calculated by dividing sales or revenue by total assets.

Current Ratio

The current ratio is a liquidity ratio that measures a company's ability to pay short-term obligations with its short-term assets.