Asked by Shaniek Wiltshier on Jul 15, 2024

verifed

Verified

What is the best financial metric to show the profit an organization generates in relationship to assets utilized?

A) ROA
B) Profit
C) Return on net worth
D) Stock price

Return on Assets (ROA)

A financial ratio that shows how profitable a company is relative to its total assets, indicating how efficient management is at using its assets to generate earnings.

Return on Net Worth

A measure of a corporation's profitability that reveals how much profit a company generates with the money shareholders have invested.

Financial Metric

A quantifiable measure used to assess the financial performance and health of a business entity.

  • Acquire knowledge on key financial metrics relevant to supply chain management and their implications.
verifed

Verified Answer

KN
Katie NguyenJul 20, 2024
Final Answer :
A
Explanation :
ROA (Return on Assets) is the best financial metric to show the profit an organization generates in relationship to assets utilized. It measures how efficiently a company is using its assets to generate profits by dividing the net income by total assets. This metric is widely used by investors and analysts to evaluate a company's performance and profitability. Choice B and D are not appropriate options as profit and stock price do not take into account the assets utilized by the organization. Choice C is related to net worth, not assets utilized.