Return on assets represents the total return on the net investment in the firm.
True or False?
True. The return on assets (ROA) is a financial ratio that measures a company's profitability by comparing its net income to its total assets. It is a percentage that represents the return or profit that the company generates from its investments in assets. The formula to calculate ROA is:
ROA = Net Income / Total Assets
To determine if the statement is true or false, you can analyze the financial statements of the company in question. You can find the net income in the income statement and the total assets in the balance sheet. By dividing the net income by the total assets, you will be able to calculate the ROA and determine if it represents the total return on the net investment in the firm.