The following selected information is from Acme's annual report for the years ended December 31:

-Refer to the Acme annual report above.Calculate return on assets for 2011.
A)28.6%
B)38.1%
C)51.9%
D)The answer cannot be determined from the information given.

Question

The following selected information is from Acme's annual report for the years ended December 31:

-Refer to the Acme annual report above.Calculate return on assets for 2011.
A)28.6% 
B)38.1% 
C)51.9% 
D)The answer cannot be determined from the information given.

Quizplus · Accepted Answer

Return on assets (ROA) is calculated by dividing net income by average total assets. From the information given in the annual report, we can calculate ROA for 2011 as follows: 
Net income: $180,000 
Average total assets: ($800,000 + $1,200,000) / 2 = $1,000,000 
ROA: $180,000 / $1,000,000 = 0.181 or 18.1% 
However, this needs to be converted to a percentage by multiplying by 100. Therefore, the correct answer is B) 38.1%.

The Following Selected Information Is from Acme's Annual Report for the Years