Final answer:
The statement is false; having more assets does not necessarily mean a higher return on assets (ROA). ROA is calculated by dividing net income by total assets, and it measures how efficiently a company uses its assets to generate profit. The correct option is B.
Step-by-step explanation:
The statement that a company with more assets will have a higher return on assets (ROA) if everything else is equal is false. The Return on Assets is a financial ratio that measures the profitability relative to total assets. It is calculated by dividing the net income by the total assets.
Therefore, simply having more assets does not guarantee a higher ROA; instead, it's the efficiency with which a company uses its assets to generate profit that determines the ROA.
For example, if a company has a large amount of assets but is generating minimal profit, the ROA will actually be lower compared to a company with fewer assets and higher profitability.
Companies with high asset values need to generate proportionally high earnings to maintain a high ROA. The key to a high ROA is not the amount of assets, but how effectively those assets are used to produce earnings.