Question

Nordstrom Inc. reports net income of $600 million for its fiscal year ended January 2016. At the beginning of that fiscal year, Nordstrom had $9,245 million in total assets. By fiscal year ended January 2016, total assets had decreased to $7,698 million.

What is Nordstrom's ROA?

Answer 1

The answer is 7.1%

Step-by-step explanation:

ROA means Return on Asset. It is one of the profitability ratios. It tells us how profitable a company is in using its assets. It is the rate of return on assets owned by the business and it is expressed as a percentage. The formula for calculating it is:

Net profit ÷ total assets.

In this the question we have the beginning and the ending total assets, what we need to do is to find the average i.e ($9,245 million + $7,698 million) / 2 =$8,472.5 million

Therefore, Nordstrom's ROA is:

$600 million / $8,472.5 million

= 7.1%