Question

Huge Cart Inc. gives you the following information pertaining to the year 2020.

Net sales$850,000
Cost of goods sold500,000
Current assets500,000
Current liabilities250,000
Average total assets1,000,000
Total liabilities550,000
Net income150,000
The rate of return on assets Huge Cart Inc. is___________

Answer 1

The rate of return on assets for Huge Cart Inc. in the year 2020 is 15%, calculated by dividing the net income ($150,000) by the average total assets ($1,000,000) and then multiplying by 100.

Step-by-step explanation:

The student is asking for the calculation of the rate of return on assets (ROA) for Huge Cart Inc. for the year 2020. The ROA is a measure of how efficiently a company uses its assets to generate profit, and it is calculated by dividing the net income by the average total assets.

To calculate Huge Cart Inc's ROA, you’ll need to use the following formula:

ROA = (Net Income / Average Total Assets) × 100

Using the information provided:

ROA = ($150,000 / $1,000,000) × 100 = 15%

Therefore, the rate of return on assets for Huge Cart Inc. in the year 2020 is 15%.