The company Panthers Limited has a return on investment (ROI) of 5% and it has a policy of a 20% net profit margin (NPM). What would be its total assets turnover (TAT) ratio?

  1. 35%
  2. 25%
  3. 10%
  4. None of the above
Explanation

Answer: D - TAT is always equal to ROI ÷ NPM. In this case, 5% ÷ 20% = 0.2, or 20%.

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