Question

Return on assets (ROA) equals ________. total assets divided by costs of goods sold net profit margin times asset turnover return on investment divided by return on net worth current assets divided by total assets

Answer 1

Answer:

net profit margin times asset turnover.

Explanation:

Return on assets is a financial ratio that shows to how efficient an entity's management is at using its assets to generate income.

A company's return on assets (ROA) is calculated as the ratio of net income in a given period to the average total assets for the period.  It is further determined as net profit margin times asset turnover.

Given that

Net profit margin = net income/sales

assets turnover = sales/ average total asset

Return on assets = Net profit margin * assets turnover

= net income/sales * sales/ average total asset

=  net income/average total asset