The return on assets is calculated by ________.
A) subtracting net income from average total assets
B) adding net income and average total assets
C) dividing net income by average total assets
D) multiplying net income and average total assets

Question

Quizplus · Accepted Answer

The return on assets (ROA) is calculated by dividing the net income by the average total assets, so the correct answer is C. Option A is incorrect because we subtract the net income from average total assets to calculate the return on investment (ROI). Option B and D are incorrect as adding or multiplying net income and average total assets won't give us the correct ROA ratio.

The Return on Assets Is Calculated by ________