Question

Juventus Corp has total assets of $4,677,964, total debt of $2,821,087, and net sales of $7,445,843. Their net profit margin for the year is 13 percent. What is Juventus's return on assets (ROA)? Round intermediate calculations to nearest two decimals if needed. Do not type the % symbol.

Answer 1

To calculate Juventus Corp's return on assets (ROA), we need to divide the net profit by the total assets. Given that the net profit margin is 13 percent, the net profit can be calculated by multiplying the net sales by the net profit margin. Finally, by dividing the net profit by the total assets, we can calculate Juventus Corp's return on assets (ROA).

Step-by-step explanation:

To calculate Juventus Corp's return on assets (ROA), we need to divide the net profit by the total assets. The formula for ROA is:

ROA = Net Profit / Total Assets

Given that the net profit margin is 13 percent, we can calculate the net profit by multiplying the net profit margin by the net sales:

Net Profit = Net Sales * Net Profit Margin

Substituting the values, we have:

Net Profit = $7,445,843 * 0.13 = $967,625.59

Finally, we can calculate ROA:

ROA = $967,625.59 / $4,677,964 = 0.2068

Rounding to the nearest two decimals, Juventus Corp's return on assets (ROA) is approximately 0.21.