Answer:
<u>(A) Compute learn on equity as follows:
</u>
Return on equity = (Net income/ Average stock holders’ equity) x 100
Return on equity = $9,938 / $47,771
Return on equity = 20.8%
Average stock holders’ equity = (48,663 + $46878)/ 2
Average stock holders’ equity = $47,771
<em>Therefore, Return on equity is 20.8%
</em>
<u>(B) Compute return on vet assets as follows:
</u>
ROA = (Net income / Average total asset) × 100
ROA = ($9,938/100,585) × 100
ROA = 9.88%
Average total asset = (110,903 + 90,266) / 2
Average total asset = $100,585
<em>Therefore, Return on net assets is 9.88%
</em>
<u>(C) Compute return on net operating assets as follows:
</u>
Return on net operating assets = (Net Operating income after tax / Average operating assets) × 100
Return on net operating assets = ($9,938 + 1,037) × 100 / 53,991
Return on net operating assets = ($10,975 / $53,991) × 100
Return on net operating assets = 20.33%
Average Operating assets = ($56,535 + 51,447) / 2
Average Operating assets = $53,991
<em>Therefore, Return on net operating assets is 20.33%
</em>
