Marino Company has provided the following information:
Net sales,$480,000
Net income,$24,000
Average total assets,$200,000
What is Marino's return on assets ratio?
A)240%
B)12%
C)5%
D)42%

Question

Marino Company has provided the following information:
 Net sales,$480,000
 Net income,$24,000
 Average total assets,$200,000
What is Marino's return on assets ratio?
A)240%
B)12%
C)5%
D)42%

Quizplus · Accepted Answer

Return on assets (12%) equals net income ($24,000) divided by average total assets ($200,000). Return on assets (12%) can also be calculated by multiplying the net profit margin ratio (5%) times the asset turnover ratio (2.4).

Marino Company Has Provided the Following Information