Using the following data for Stevenson Industries, compute the return on assets ratio. $$\begin{array} { l r }
\text { Net Income } & \$ 150,000 \
\text { Total Assets } 12 / 31 / 14 & 2,410,000 \
\text { Total Assets 12/31/13 } & 1,980,000 \
\text { Net Sales } & 250,000
\end{array}$$
A) 6.2%
B) 10.4%
C) 6.8%
D) 11.4%

Question

Using the following data for Stevenson Industries, compute the return on assets ratio. $$\begin{array} { l r } 
\text { Net Income } & \$ 150,000 \
\text { Total Assets } 12 / 31 / 14 & 2,410,000 \
\text { Total Assets 12/31/13 } & 1,980,000 \
\text { Net Sales } & 250,000
\end{array}$$
A) 6.2%
B) 10.4%
C) 6.8%
D) 11.4%

Quizplus · Accepted Answer

The return on assets (ROA) is calculated as Net Income divided by Average Total Assets. Average Total Assets = (2,410,000 + 1,980,000) / 2 = 2,195,000. ROA = 150,000 / 2,195,000 = 0.0683 or 6.8%.

Using the Following Data for Stevenson Industries, Compute the Return