The Return on Assets Model States: ROA = Net Profit

question 31

True/False

The Return on Assets model states: ROA = net profit margin × asset turnover × the equity multiplier.

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Definitions:

Financial Statements

The comprehensive reports that summarize a company's financial performance, position, and cash flows over a specific period.

Current Ratio

An assessment tool that determines an enterprise's capability to settle short-term due debts by dividing its immediate assets by its immediate liabilities.

Balance Sheet

A financial statement that reports a company's assets, liabilities, and shareholders' equity at a specific point in time, offering a snapshot of its financial position.

Sales On Account

Transactions where goods or services are sold and payment is deferred to a future date, effectively allowing the buyer to purchase on credit.