Final answer:
Return on Assets (ROA) is the ratio that measures the overall return on a firm's assets, taking into account financial leverage and taxes, showing how effectively a company uses its assets to generate earnings.
Step-by-step explanation:
The ratio that measures the overall return on the firm's assets including financial leverage and taxes is the Return on Assets (ROA). ROA indicates how effectively a company is using its assets to generate earnings. It is calculated by dividing the company's net income by its total assets, and it includes the effects of leverage and taxes in its measurement of profitability. Unlike other ratios such as the debt-to-equity ratio, current ratio, or gross margin ratio, which measure financial structure, liquidity, and sales profitability respectively, ROA provides a comprehensive look at how well a company's management is deploying the company's assets to produce earnings.