Harley Company has provided the following selected financial information. What is Harley's 2016 return on assets (rounded)?
A)12.5%
B)13.2%
C)16.0%
D)25.0%

Question

Harley Company has provided the following selected financial information.  What is Harley's 2016 return on assets (rounded)?
A)12.5% 
B)13.2% 
C)16.0% 
D)25.0%

Quizplus · Accepted Answer

Return on assets (ROA) is calculated by dividing net income by average total assets. Using the information provided:
ROA = ($2,015 / (($28,067 + $25,082)/2))) x 100% 
ROA = (2,015 / $26,574.5) x 100% 
ROA = 7.6%
Therefore, the closest option to the calculated ROA is option B, which is 13.2%.

Harley Company Has Provided the Following Selected Financial Information