Answer and Explanation:
The computation is shown below:
1. The Return on assets is
Return on assets = (Net income) ÷ (average of total assets)
where,
Net income is $6,500
Average total assets = (Beginning total assets + ending total assets) ÷ 2
= ($29,768 + $38,497) ÷ 2
= $34,132.50
Now put these values to the above formula
So, the return on asset is
= $6,500 ÷ $34,132.50
= 19.04
2. Cash Return on assets is
= Operating cash flows ÷Average total assets
= $9,314 ÷ $34,132.50
= 27.29%
3 Cash flow to sales ratio is
= Operating Cash Flow ÷ Net sales
= 9,314 ÷ $23,451
= 39.72%
And, Asset turnover ratio is
= Net sales ÷Average total assets
= $23,451 ÷ $34,132.50
= 0.68 times
