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- Subject
- Analysis of Financial Statementsfinance-mcqs › analysis-of-financial-statements
- Published
- 25 Oct 2021
- Last updated
- 28 May 2026
Explanation
The return on assets (ROA) is calculated by multiplying the profit margin by the total asset turnover. Here, 4.5% (0.045) multiplied by 1.8 equals 0.081, which corresponds to option B.
More Analysis of Financial Statements MCQs
Practice related questions from the same subject.
- 1.Multiplying the equity multiplier by return on assets results in the calculation of which financial metric?
- 2.What is the term for evaluating a company's performance by measuring it against top competitors?
- 3.If the return on assets (ROA) is 6.7% and the equity multiplier is 2.5, what is the return on equity (ROE)?
- 4.What does a high price-to-earnings (P/E) ratio typically indicate about a company?
- 5.If a company has a return on assets of 5.5%, total assets valued at $3,000, and common equity of $1,050, what is the return on equity?
- 6.The price-to-earnings ratio and price-to-cash-flow ratio belong to which category of financial ratios?
- 7.Which formula involves multiplying total assets by the profit margin?
- 8.Which category of ratios connects a company's stock price to its book value per share, cash flow, and earnings?
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