Question

Cage company had income of $350 million and average invested assets of $2,000 million. its return on assets (roa) is

Answer 1

The answer is: 17.5%

Step-by-step explanation:

Return on Assets (ROA) is a profitability ratio computed to evaluate management's efficiency in employing the business assets to generate profits. It describes the portion of net income which is generated from the assets in a given period. The calculation is done by dividing the net income in a given period by the average total asset value in that period and multiplying the result by 100%. The average total asset value is considered to be more accurate than total asset value since the total asset value can vary over time due to: the purchase and sale of assets, seasonal fluctuation in sales, changes in working capital (current assets less current liabilities) and so on.

The ROA for Cage company, assuming the net income is $350,000,000, is: 17.5% (($350,000,000/$2,000,000,000)*100%)

Answer 2

Cage company had income of $350 million and average invested assets of $2,000 million. its return on assets (roa) is

The formula of return on assets is net income divided by average assets.
Given that the net income is $350 million, average asset is $2000

The answer is 0.0005