Cecilia Company reported net income of $1,200,000.Their average total liabilities were $4,300,000 and average total stockholders' equity was $5,200,000.Interest expense was $100,000 and their tax rate was 40%.What was their return on assets ratio?

Question

Quizplus · Accepted Answer

The return on assets ratio (13.3%) = Net income ($1,200,000) + Interest expense net of tax [$100,000 F1F1F1S1F1F1F10 (1 - .4)] F1F1F1S1F1F1F10 Average total assets ($4,300,000 + $5,200,000)

Cecilia Company Reported Net Income of $1,200,000