Return on Assets: It is a profitability ratio that is used to measure the net profits generated by total assets throughout the period. In simple words, it indicates the efficiency of a company in dealing its assets to earn net income. It is calculated by using following formula: Return on Assets (ROA) = Net Income Average Total assets × 100 This ratio is used in comparing a company with its competitor in the industry since it shows the ability of any business to generate profits from its assets which helps investors in recognizing good stock opportunities. The ranking of company A, company B and company C in terms of return on assets without computing the same for each company.

Question

Want to see the full answer?

Answer 1

Question

Chapter 1, Problem 1.6.1MBA

To determine

Return on Assets:

It is a profitability ratio that is used to measure the net profits generated by total assets throughout the period. In simple words, it indicates the efficiency of a company in dealing its assets to earn net income. It is calculated by using following formula:

Return on Assets (ROA) = Net IncomeAverage Total assets×100

This ratio is used in comparing a company with its competitor in the industry since it shows the ability of any business to generate profits from its assets which helps investors in recognizing good stock opportunities.

The ranking of company A, company B and company C in terms of return on assets without computing the same for each company.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Alimentation Couche-Tard Inc. is a leading convenience store operator in Canada, with Couche-Tard stores in Quebec and Mac's stores in central and western Canada. It also operates Circle K shops in the United States and Ingo automated fuel sites in Sweden and Denmark. Revenues Cost of sales Gross profit Operating, selling, administrative, and general expenses (Gain) loss on disposal of property and equipment and other assets Depreciation, amortization, and impairment Total operating expenses CONSOLIDATED STATEMENTS OF EARNINGS For the years ended April 24, 2022, April 25, 2021, and April 28, 2020 (in millions of U.S. dollars) Operating income Share of earnings of joint ventures and associated companies Net financial expenses Earnings before income taxes Income taxes Net earnings DAM..:.-4. Revenues Cost of sales Gross profit $ Operating, selling, administrative, and general expenses (Gain) loss on disposal of property and equipment and other assets Depreciation, amortization, and…

An entity reported the following data for the current year. What amount should be reported as income from continuing operations? Net Sales $ 9.500,000 Cost of Goods Sold 4.000.000 Selling Expenses 1,000,000 Administrative Expenses 1,200.000 Interest Expense 700.000 Gain from expropriation of Land 500.000 Income Tax 800.000 Income from Discontinued Operations 600,000 Unrealized Gain on Equity Investment at FVOCI 900,000 Unrealized Loss on future contracts designated as Cash Flow Hedge 400.000 Increase in projected benefit obligation due to actuarial assumptions 300,000 Foreign Translation Adjustment – Debit 100,000 Revaluation Surplus 2.500.000

Book Value of Fixed Assets In a recent balance sheet, Macrohard, Inc. reported Property, Plant, and Equipment of $70,600 million and Accumulated Depreciation of $40,200 million. a. What was the book value of the fixed assets? million b. Would the book value of Macrohard's fixed assets normally approximate their fair market values?