Question

River corp's total assets at the end of last year were $390,000 and its net income was $32,750. what was its return on total assets?

Answer 1

10.23%

return on total assets of River corp who's total assets at the end of last year were $390,000 and its net income was $32,750 was 10.23%

What was the return on total assets?

This can be found by the formula:

= Net income / Total assets x 100%

This then on substitution gives:

= 32,750 / 320,000 x 100%

= 10.23%

Hence, the return was 10.23%.

What is return on total assets?

The ratio of a company's profits before interest and taxes (EBIT) to its total net assets is called return on total assets (ROTA).

What is meant by return on asset?

• The return on assets (ROA), sometimes known as the return on total assets, is a metric for gauging how much money a company makes off of its capital.
• This profitability ratio illustrates the rate of growth in profits produced by an organization's assets.

What Makes a Strong ROA?

• Typically, a ROA of 5% or above is seen as good; a ROA of 20% or higher is regarded as great.
• In general, a corporation is more effective at making profits if its ROA is higher.
• However, the ROA of any one company must be viewed in the context of its rivals in the same sector and industry.

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