Answer:
Return on Total Assets = 10.2%
Explanation:
The Return on Total Assets (ROTA) of a company is a ratio of the measure of a company's earnings before income and taxes, relative to its total net assets. Simply put, it is the amount of money a company receives in a financial year, relative to its total assets. The formula for calculating ROTA is given as follows:
ROTA = ( EBIT) ÷ Total Assets
where:
EBIT = Earnings before income and taxes = net income = $32,750
Total Assets = $320,000
∴ ROTA = 32,750 ÷ 320,000 = 0.102
converting 0.102 to percentage, we multiply by 100
∴ ROTA = 0.102 × 100 = 10.2%
