Return on Assets Can Be Calculated As

question 71

Multiple Choice

Return on assets can be calculated as:

• A) return on equity plus the equity multiplier.
• B) net interest income divided by earning assets.
• C) asset utilization minus the expense ratio and the tax ratio.
• D) interest income minus interest expense.
• E) earning assets divided by average total assets.

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Definitions:

Traditional Format Income Statement

A financial statement that shows a company's revenues, expenses, and profits, typically starting with sales and subtracting cost of goods sold and other expenses.

Merchandise Inventory

The total value of goods held by a company for the purpose of resale.

Selling Expenses

Expenses directly related to the sale of goods or services, like marketing expenses and wages for sales personnel.

Administrative Expenses

Costs related to the general administration of a business, such as salaries of senior executives, legal and accounting services.