Question

Fastforward has net income of $18,955, and assets at the beginning of the year of $200,000. assets at the end of the year total $246,000. compute its return on assets. a. 7.7%. b. 8.5%. c. 9.5%. d. 11.8%

Answer 1

Its return on assets is 8.5%.

What is  return on assets?

The return on assets measures how profitable a company's assets are at generating income.

Return on assets (ROA) measures how lucrative a company is in relation to the assets or resources it owns or controls. ROA can help investors uncover potential stock opportunities because it reveals how efficient a firm is at leveraging its assets to produce profits.

Return on Equity (ROE) is commonly defined as net income divided by equity, whilst Return on Assets (ROA) is defined as net income divided by average assets.

Return on Assets (ROA) is a sort of ROI metric that assesses a company's profitability in relation to its total assets.

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