Answer:
15.2%
Explanation:
Return on Total Asset is the ratio of net income ratio to total asset of the company. It measure the productivity and efficiency of all the assets used to generate this net income.
As per given Data
Year 2 Year 1
Net sales $478,500 $426,250
Cost of goods sold $276,300 $250,120
Interest expense $9,700 $10,700
Net income before tax $67,250 $52,680
Net income after tax $46,050 $39,900
Total assets $317,100 $288,000
Total liabilities $181,400 $167,300
Total equity $135,700 $120,700
Formula for Return on total assets
Return on Total Assets = ( Net income / Average total assets ) x 100
Now we need to calculate the average Assets
Average Assets = ($317,100 + $288,000) / 2 = $302,550
Net Income for year 2 = $46,050
Placing values in the formula
Return on Total Assets = ( $46,050 / $302,550 ) x 100
Return on Total Assets = 15.2%
