Question

One important difference between return on assets (ROA) and return on common shareholder’s equity (ROCE) is that: Select one: a. ROCE does not differentiate based on how a company finances its assets; ROA does b. ROCE does not distinguish between the different types of income items, such as income from continuing operations, discontinued operations, extraordinary items and changes in accounting principles; ROA does c. ROA does not distinguish between the different types of income items, such as income from continuing operations, discontinued operations, extraordinary items and changes in accounting principles; ROCE does d. ROA does not differentiate based on how a company finances its assets; ROCE does

Answer 1

Option d. is correct

Step-by-step explanation:

The return on assets reflects the percentage of how a company's assets can generate revenue.

The return on common equity, or ROCE, refers to the amount of profit or net income earned by a company per investment dollar.

One important difference between return on assets (ROA) and return on common shareholder’s equity (ROCE) is that ROA does not differentiate based on how a company finances its assets; ROCE does.