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From the shareholder perspective, which ratio(s) has the characteristic higher is better? 1. Return On Asset (ROA) II. Tota
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Answer #1

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Answer:

Consider option 1:

Both Return on Assets and Return on Equity are important for investors as well as shareholders of the company who use it quite frequently to assess the company's health and efficiency in utilization of resources. So, from a shareholder's perspective, it is very important to have better ROA " the higher the better"

Consider option 2:

When the debt to capital ratio increases, it cites an immediate action requires to deleverage the excess debt to maintain the credit ratings and financial health of the company. So, debt to capital ratio is not desirable to be higher from a shareholder's perspective

Consider option 3:

Profit margin is an important metric that investors look forward for assessing the profitability of the company and in many ways one of the major determinants of the share price in the stock market. So, from a shareholder's perspective, it is very important to have better Profit margin " the higher the better"

From above, we find options 1 and 2 to be the right solutions. So, the right option in None of these as a combination of those is not cited in the options given.

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