Which of the Following Describes the Return on Assets Ratio

question 81

Multiple Choice

Which of the following describes the return on assets ratio?

• A)Average total assets divided by sales
• B)Net sales divided by net income
• C)Net income divided by average total assets
• D)Average total assets divided by net income

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Definitions:

Financial Leverage

The use of borrowed money to increase the potential return of an investment, which also increases the risk of loss.

EPS

Earnings Per Share, a measure of a company's profitability calculated by dividing its net earnings by the number of outstanding shares.

Earnings Per Share

A company's net income divided by the number of its outstanding shares, indicating the company's profitability on a per-share basis.

Debt

An amount of money borrowed by one party from another, typically repaid with interest.