A company reports the following income statement and balance sheet information for the current year:Net income$638,800Interest expense112,730Average total assets5,330,000Determine the return on total assets. If required, round the answer to one decimal place.fill in the blank 1 %

Return on total assets: Return on total assets measures the company's ability to generate the profit before interest in relation to the company's assets. Formula : Return on total assets = (Net income + Interest expense) / Average total assetsReturn on total assets = (Net income + Interest expense) / Average total assets = ($638,800 + $112,730) / $5,330,000 = 14.1%

Answered: A company reports the following income…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A company reports the following income statement and balance sheet information for the current year:

Net income	$638,800
Interest expense	112,730
Average total assets	5,330,000

Determine the return on total assets. If required, round the answer to one decimal place.
fill in the blank 1 %

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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