A company has Return on Assets (ROA) of 10% and profit margin of 2%. Compute the total assets turnover.

Correct option is B

ROA = Profit Margin × Total Assets Turnover

Rearranging to solve for Total Assets Turnover (TA):

Total Assets Turnover (TAT) = $$\frac{\text{ROA}}{\text{Profit Margin}}$$​ 

Giveen:

• ROA = 10% = 0.10
  
• Profit Margi (PM) = 2% 0.025

​    Substiture the values:

TAT = $$\frac {0.10}{0.02}$$= 5​