Which of the following statements is true? An increase in average total assets r
ID: 2479644 • Letter: W
Question
Which of the following statements is true?
An increase in average total assets results in a decrease in both the asset turnover ratio and the net profit margin ratio.
A decrease in net income decreases both the net profit margin ratio and the asset turnover ratio.
An increase in net income increases both the net profit margin ratio and the return on assets ratio.
A decrease in average total assets results in an increase in the asset turnover ratio and a decrease in the net profit margin ratio.
A.An increase in average total assets results in a decrease in both the asset turnover ratio and the net profit margin ratio.
B.A decrease in net income decreases both the net profit margin ratio and the asset turnover ratio.
C.An increase in net income increases both the net profit margin ratio and the return on assets ratio.
D.A decrease in average total assets results in an increase in the asset turnover ratio and a decrease in the net profit margin ratio.
Explanation / Answer
A.An increase in average total assets results in a decrease in both the asset turnover ratio and the net profit margin ratio.
The asset turnover ratio and profit margin indirectly related to each other.
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