The rate of return on total assets is computed by dividing

Question

Quizplus · Accepted Answer

The rate of return on total assets is calculated by dividing the net income by the average total assets, as it shows how efficiently a company is utilizing its assets to generate profits. Dividing net sales by ending total assets or net income by ending total assets doesn't take into account the fluctuation in assets throughout the year, while using average total assets gives a more accurate picture of asset utilization over the entire year.

The Rate of Return on Total Assets Is Computed by Dividing