Johnson Foods Company had a before-tax profit of $250 000 after deducting interest expenses of $18 000. Johnson Foods' liabilities and equity total $1 875 000. Return on total assets, before finance costs and tax is:

Question

Quizplus · Accepted Answer

Return on total assets before finance costs and tax is calculated as (Profit before tax + Interest expenses) / Total assets. Here, it is ($250,000 + $18,000) / $1,875,000 = 14.29%.

Johnson Foods Company Had a Before-Tax Profit of $250 000