Cloverton Corporation had net income of $30,000, net sales of $1,000,000, and average total assets of $500,000. Its return on total assets is:

Question

Quizplus · Accepted Answer

Return on total assets is calculated by dividing net income by average total assets and multiplying by 100.

ROA = (Net Income / Average Total Assets) * 100 
ROA = ($30,000 / $500,000) * 100 
ROA = 6%

Therefore, the answer is C.

Cloverton Corporation Had Net Income of $30,000, Net Sales of $1,000,000