Question

Look at the following summary of ABC Inc.’s accounts on December 31, 2012.
current liabilities: $25,000
total assets: $3,00,000
investments: $75,000
total liabilities: $80,000
net income (after tax): $100,000
current assets: $55,000
inventory: $5,000.

Calculate the return on assets.

A: 1 : 3

B: 3 : 2

C: 3 : 1

D: 1 : 2

E: 2 : 1

Answer 1

@mathmath333

Answer 2

@mathmate

Answer 3

An indicator of how profitable a company is relative to its total assets. ROA gives an idea as to how efficient management is at using its assets to generate earnings. Calculated by dividing a company's annual earnings by its total assets, ROA is displayed as a percentage. Sometimes this is referred to as "return on investment".
( http://www.investopedia.com/terms/r/returnonassets.asp)

Is the total assets $3,000,000 or $300,000 ?

Answer 4

it 3,00,000