The net operating profit margin and the net operating asset turnover components of net operating assets are often termed value drivers, which refers to their positive influence on stock value by virtue of their role as components of return on net operating assets (RNOA).

a. How do profit margins and asset turnover ratios influence stock values?

b. Assuming that profit margins and asset turnover ratios are value drivers, what insight does this give us about managing companies if the goal is to create shareholder value?