Formula such as net income available for common stockholders divided by total assets is used to calculate__________________________?
Correct answer: C. Return on total assets
- A. Return on debt
- B. Return on total equity
- C. Return on total assets
- D. Return on sales
Explanation
Net income available to common stockholders divided by total assets measures return on total assets, indicating how efficiently the asset base generates profit.
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Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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