Asked by
Mario Aigner
on Oct 19, 2024Verified
Operating ROA is calculated as ________, while ROE is calculated as ________.
A) EBIT/total assets; net profit/total assets
B) net profit/total assets; EBIT/total assets
C) EBIT/total assets; net profit/equity
D) net profit/EBIT; sales/total assets
Operating ROA
A financial ratio that measures the efficiency of a company's operation by dividing its operating income by its total assets.
Net Profit
The amount of income that remains after all expenses, taxes, and costs have been subtracted from total revenue; a key indicator of a company's profitability.
EBIT
Earnings Before Interest and Taxes, a measure of a firm's profit that includes all expenses except interest and income tax expenses.
- Conduct calculations and provide interpretations for financial ratios, particularly in terms of liquidity, leverage, and profitability.
Verified Answer
TA
Learning Objectives
- Conduct calculations and provide interpretations for financial ratios, particularly in terms of liquidity, leverage, and profitability.