What is type of Operating income to total assets ratio? Leverage, Profitability, Asset composition or Liquidity? and why?
closed as off-topic by Bob Jansen♦ Jul 11 '15 at 5:48
This question appears to be off-topic. The users who voted to close gave this specific reason:
- "Basic financial questions are off-topic as they are assumed to be common knowledge for those studying or working in the field of quantitative finance." – Bob Jansen
It is a measure of profitability commonly used in the Banking industry. We can exclude the other 3 answers: it does not take into account the bank's leverage (i.e. it is a measure of pre-leverage profitability), it has nothing to do with asset composition (since it is based on total assets, irrespective of their composition), and it has nothing to do with liquidity (which again would have to be based on a distinction between liquid and illiquid assets).