Final answer:
The student's question pertains to calculating a business's return on assets (ROA) by dividing net income by average assets, a performance metric in financial analysis given the context of assets, liabilities, and accounting profits.
Step-by-step explanation:
The question relates to measuring a business's performance by dividing net income by average assets. To calculate the average assets, you add the beginning and ending values and divide by 2. The given financial data lists assets (reserves: 30, bonds: 50, and loans: 50) and liabilities (deposits: 300 and equity: 30).
We can also discuss concepts such as accounting profit (total revenues minus explicit costs), average profit (profit margin), and the principles of economies of scale and diminishing marginal productivity.
Using the given information, the net worth or equity of the firm is the difference between total assets and liabilities (130 - 300 = -170); the firm appears to have a negative net worth, indicating financial distress.
For educational purposes, let's say the net income is the difference between revenues and explicit costs (including depreciation). If a business had total assets worth 130 at both the beginning and end of the period, the average assets would also be 130.
If the firm had a net income, say 20, then dividing this net income by the average assets would yield a return on assets (ROA) ratio.