The following information is provided for Nguyen Company and Northwest Corporation. $\begin{array}{lll}\text { (in } \$ \text { millions) }&\text { Nguven Company }&\text { Northwest Corporation }\
\text { Net income } 2017 & \$ 165 & \$ 420 \
\text { Net sales } 2017 & 1,650 & 4,900 \
\text { Total assets } 12 / 31 / 15 & 1,000 & 2,400 \
\text { Total assets } 12 / 31 / 16 & 1,050 & 3,000 \
\text { Total assets } 12 / 31 / 17 & 1,150 & 4,000
\end{array}$ What is Northwest's return on assets for 2017?
A)15.6%
B)10.5%
C)14.0%
D)12.0%

Question

Quizplus · Accepted Answer

Return on assets (ROA) is calculated as Net Income divided by Average Total Assets. For Northwest Corporation, the average total assets for 2017 is $(3,000 + 4,000) / 2 = 3,500$. The ROA is then $420 / 3,500 = 0.12$ or 12.0%.

The Following Information Is Provided for Nguyen Company and Northwest