Question

Assume Metro Company had a net income of​ $2,100 for the year ending December 2018. Its beginning and ending total assets were​ $33,500 and​ $19,500, respectively. Calculate​ Metro's return on assets​ (ROA). (Round your percentage answer to two decimal​ places.)

Answer 1

Answer:

7.92%

Explanation:

The computation of the return on total assets is shown below:

Return on assets = (Net income) ÷ (average of total assets)

where,  

Net income is $2,100

Average total assets = (Beginning total assets + ending total assets) ÷ 2

= ($33,500 + $19,500) ÷ 2

= $26,500

Now put these values to the above formula  

So, the ratio would equal to

= $2,100 ÷ $26,500

= 7.92%