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RUDIKE [14]
3 years ago
11

Oahu Industries' average total assets for the year are $4,000,000, its average total stockholders' equity for the year are $3,00

0,000, its net income is $800,000, its gross margin is $2,000,000, and its net sales are $10,000,000. What is Oahu's return on assets? Group of answer choices
Business
1 answer:
Mandarinka [93]3 years ago
8 0

Answer:

20%

Explanation:

Return on assets is a profitability ratio that shows how much in net income a company is able to generate from its assets.

It is a financial measure that shows the net profit a company is able to generate per $1 invested in assets.

Mathematically,

Return on asset = net income/average total asset

= $800,000/$4,000,000

= 0.2

= 20%

This means that the company's management is a to generate a net income of 20 cents for every $1 invested in assets.

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