Which ratio is not one of the three ratios that multiply together to produce the return on equity ratio?Total asset turnoverNet profit marginFinancial leverageOperating profit margin
Question
Which ratio is not one of the three ratios that multiply together to produce the return on equity ratio?Total asset turnoverNet profit marginFinancial leverageOperating profit margin
Solution
The ratio that is not one of the three ratios that multiply together to produce the return on equity ratio is the Operating profit margin. The three ratios that make up the return on equity ratio are the Net profit margin, Total asset turnover, and Financial leverage.
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