Asked by Katherine Lupercio on Jul 14, 2024
Verified
What is Marino's return on assets?
A) 240%
B) 12%
C) 5%
D) 42%
Return on Assets
An indicator of how profitable a company is relative to its total assets, measuring the efficiency in using assets to generate earnings.
Net Income
The total earnings of a company after all expenses and taxes have been deducted from revenue, indicating the company's profitability.
Average Total Assets
The average value of all assets owned by a company over a specific period, useful in assessing company productivity and investment returns.
- Understand how to calculate and interpret the return on assets (ROA) ratio.
Verified Answer
ROA = Net Income / Average Total Assets
ROA = $24,000 / $200,000
ROA = 0.12 or 12%
Therefore, the correct answer is B.
Learning Objectives
- Understand how to calculate and interpret the return on assets (ROA) ratio.
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