Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

14. Financial Statement Analysis

Ratios: Return on Assets (ROA)

Financial Accounting

14. Financial Statement Analysis

Ratios: Return on Assets (ROA)

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Multiple Choice

Which of the following is NOT considered an asset management ratio?

Total Asset Turnover Ratio

Inventory Turnover Ratio

Receivables Turnover Ratio

Return on Assets (ROA)

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Verified step by step guidance

Step 1: Begin by understanding the concept of asset management ratios. These ratios measure how efficiently a company uses its assets to generate revenue or manage operations. Common examples include Total Asset Turnover Ratio, Inventory Turnover Ratio, and Receivables Turnover Ratio.

Step 2: Review the definition of Return on Assets (ROA). ROA is a profitability ratio that measures how effectively a company generates profit from its assets. It is calculated as Net Income divided by Total Assets, and its focus is on profitability rather than asset management efficiency.

Step 3: Compare the listed ratios to determine which one does not fit the category of asset management ratios. Asset management ratios focus on operational efficiency, while ROA focuses on profitability.

Step 4: Identify that Total Asset Turnover Ratio, Inventory Turnover Ratio, and Receivables Turnover Ratio are all asset management ratios because they measure how well assets are utilized in operations.

Step 5: Conclude that Return on Assets (ROA) is NOT an asset management ratio because it is a profitability ratio, not a measure of operational efficiency.