객관식
A firm has a Return on Assets (ROA) of 12\% and a Return on Equity (ROE) of 52\%. What is the firm's equity multiplier?
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14. Financial Statement Analysis
Ratios: Return on Assets (ROA)
객관식
Return on investment (ROI), specifically Return on Assets (ROA), can be decomposed into which of the following two measures?
A
Earnings per share and price-to-earnings ratio
B
Net profit margin and asset turnover
C
Current ratio and debt-to-equity ratio
D
Gross profit margin and inventory turnover
검증된 단계별 안내1
Understand the concept of Return on Assets (ROA): ROA measures how efficiently a company uses its assets to generate profit. It is calculated as Net Income divided by Total Assets.
Learn about the decomposition of ROA: ROA can be broken down into two components—Net Profit Margin and Asset Turnover. This decomposition helps analyze profitability and efficiency separately.
Define Net Profit Margin: Net Profit Margin is calculated as Net Income divided by Revenue. It indicates how much profit a company generates for every dollar of revenue.
Define Asset Turnover: Asset Turnover is calculated as Revenue divided by Total Assets. It measures how efficiently a company uses its assets to generate revenue.
Combine the two measures: ROA = Net Profit Margin × Asset Turnover. This formula shows how profitability and efficiency together contribute to the overall return on assets.
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