Question

1. Which of the following ratios use de-levered net income? (check all that apply)
Financial Leverage
Return on Equity
Return on Assets
Asset Turnover
Return on Sales

Answer 1

Answer:

The ROA (Return on Assets) and the Return on Sales are the ratios which use the de-levered net income.

Explanation:

The shareholders want to evaluate or measure the return without any effects of the interest expense. De- levered net income is required to alter the net income so that it can be added back it to the interest expense.

The ratio which using De-levered net income are the ROA that is Return on assets and the Return on Sales because it is used to measure the return.