Which of the following results in an increase in the return on assets ratio?

A) A decrease in the total asset turnover ratio.
B) An increase in the net profit margin ratio.
C) Purchasing a building by signing a long-term mortgage payable.
D) Using cash to purchase land.

Return on Assets Ratio

A financial ratio that measures how efficiently a company uses its assets to generate profit, calculated as net income divided by total assets.

Total Asset Turnover Ratio

A financial metric that measures the efficiency of a company's use of its assets to generate sales revenue.

Net Profit Margin Ratio

A financial measurement that calculates how much of each dollar of revenues is translated into profits after accounting for all expenses, taxes, and interest, expressed as a percentage.