BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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9.39%
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10.59%
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9.94%
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10.41%
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Detailed explanation-1: -Although there are multiple formulas, return on assets (ROA) is usually calculated by dividing a company’s net income by the average total assets. Average total assets can be calculated by adding the prior period’s ending total assets to the current period’s ending total assets and dividing the result by two.
Detailed explanation-2: -The return on total assets ratio is calculated by dividing earnings after tax by total assets.
Detailed explanation-3: -The return on assets ratio formula is calculated by dividing net income by average total assets. This ratio can also be represented as a product of the profit margin and the total asset turnover. Either formula can be used to calculate the return on total assets.
Detailed explanation-4: -Net assets are the value of a company’s assets minus its liabilities. It is calculated ((Total Fixed Assets + Total Current Assets) – (Total Current Liabilities + Total Long Term Liabilities)).