The balance sheet of Hidden Valley Farms reports total assets of $450,000 and $550,000 at the beginning and end of the year,respectively.Net income and sales for the year are $100,000 and $800,000,respectively.What is Hidden Valley's return on assets?
A)10%.
B)20%.
C)160%.

Question

Quizplus · Accepted Answer

Return on assets (ROA) is calculated by dividing net income by total assets.

ROA = Net Income/Total Assets

ROA = $100,000/$450,000

ROA = 0.222 or 22.2%

Therefore, the answer is B) 20%.

The Balance Sheet of Hidden Valley Farms Reports Total Assets