Luther's return on assets (ROA)for the year ending December 31,2009 is closest to:
A)1.6%
B)6.7%
C)2.3%
D)2.6%

Question

Quizplus · Accepted Answer

B)ROA = (Net income + Interest Expense)/total assets.
This is a little tricky in that total assets aren't given in the problem.The student must remember the basic balance sheet equation A = L + SE.Total Liabilities and Shareholders' Equity is given and this is the same as total assets.So ROA = (10.6 + 25.1/533.1 = 0.067 or 6.7%

Luther's Return on Assets (ROA)for the Year Ending December 31,2009