Question

Question 11 Using the financial information below, calculate company XYZ's ROA (adjusted for debt financing). Enter...

Question 11

Using the financial information below, calculate company XYZ's ROA (adjusted for debt financing). Enter your answer as a decimal with four places of precision (i.e. 0.1234).

xid-100948877_1

0 0
Add a comment Improve this question Transcribed image text
Answer #1

Formula to calculate Return On Asset, ROA = Net Income/Average Assets

where, Net Income = net earnings/net income in a financial year

   Average Assets = present year's assets plus previous year's assets divided by 2

Given, Net Income = 2000

  Average Assets = (32000+26500)/2 = 29250

ROA = 2000/29250 = 0.0684 = 6.84%

Hence the answer is = 0.0684

This means that the profit earned per rupee by the company is 6.84 paise.

Add a comment
Know the answer?
Add Answer to:
Question 11 Using the financial information below, calculate company XYZ's ROA (adjusted for debt financing). Enter...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT