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Which accounting ratio indicates how effectively a company is using its assets t

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Question: Which accounting ratio indicates how effectively a company is using its assets to generate earnings?

Options:

  1. Debt to equity ratio
  2. Return on assets (ROA)
  3. Current ratio
  4. Quick ratio

Correct Answer: Return on assets (ROA)

Solution: 

Return on assets (ROA) shows how effectively a company is using its assets to generate earnings.

Which accounting ratio indicates how effectively a company is using its assets t

Practice Questions

Q1
Which accounting ratio indicates how effectively a company is using its assets to generate earnings?
  1. Debt to equity ratio
  2. Return on assets (ROA)
  3. Current ratio
  4. Quick ratio

Questions & Step-by-Step Solutions

Which accounting ratio indicates how effectively a company is using its assets to generate earnings?
  • Step 1: Understand the Question
  • Step 2: Identify the Accounting Ratio
  • Step 3: Know What ROA Means
  • Step 4: Conclusion
No concepts available.
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