Quad Sales has the following information for the year 2015:
$$\begin{array} { | l | r | }
\hline \text { Total assets, January 1 } & \$ 102,000 \
\hline \text { Total assets, December 31 } & 108,000 \
\hline \text { Net income } & 2,100 \
\hline \text { Interest expense } & 0 \
\hline
\end{array}$$
How much is the return on total assets? (Please round to two decimal places.)

Question

Quad Sales has the following information for the year 2015:
$$\begin{array} { | l | r | } 
\hline \text { Total assets, January 1 } & \$ 102,000 \
\hline \text { Total assets, December 31 } & 108,000 \
\hline \text { Net income } & 2,100 \
\hline \text { Interest expense } & 0 \
\hline
\end{array}$$
How much is the return on total assets? (Please round to two decimal places.)

Quizplus · Accepted Answer

Return on total assets is calculated as Net Income divided by Average Total Assets. Average Total Assets = (102,000 + 108,000) / 2 = 105,000. Return on Total Assets = 2,100 / 105,000 = 0.02 or 2%.

Quad Sales Has the Following Information for the Year 2015