Question

Matured Water Services had net income for the month of October of $ 35 comma 000. Assets as of the beginning and end of the month totaled $ 374 comma 000​, and $ 326 comma 000​, respectively. Calculate Matured Water​ Services' ROA for the month of October.

Answer 1

ROA = 10%

Step-by-step explanation:

Net Income October: $35,000

Assets Beginning October: $374,000

Assets Ending October: $326,000

Average Total Assets: ($374,000 + $326,000)/2= $350,000

Return on Assets (ROA) = Net Income for the Period / Average Total Assets for the Period

ROA: $35,000 / $350,000 = 10%