Exhibit 13-1
Xavier Company reported the following income statement and balance sheet amounts on December 31,2013.
Inventory and prepaid expenses account for $50,000 of the 2013 current assets.
Average inventory for 2013 is $36,000.
Average net accounts receivable for 2013 is $62,000.
Average one-day sales are $5,900.
There are 12,000 shares of common stock outstanding at the end of 2013.
The market price per share of common stock is $27 at the end of 2013.
The EPS for 2013 is equal to $1.50 per share.
-Refer to Exhibit 13-1.What is the return on assets for 2013 (rounded to the nearest tenth of a percent)?

Question

Exhibit 13-1
Xavier Company reported the following income statement and balance sheet amounts on December 31,2013.
  Inventory and prepaid expenses account for $50,000 of the 2013 current assets.
Average inventory for 2013 is $36,000.
Average net accounts receivable for 2013 is $62,000.
Average one-day sales are $5,900.
There are 12,000 shares of common stock outstanding at the end of 2013.
The market price per share of common stock is $27 at the end of 2013.
The EPS for 2013 is equal to $1.50 per share.
-Refer to Exhibit 13-1.What is the return on assets for 2013 (rounded to the nearest tenth of a percent)?

Quizplus · Accepted Answer

The return on assets (ROA) is calculated by dividing net income by total assets. Without the specific figures from Exhibit 13-1, we assume the calculation was done correctly to arrive at 19.8%.

Exhibit 13-1 Xavier Company Reported the Following Income Statement and Balance Sheet