ROA (return on assets) is measured by Earning before interest & tax / Average total assets Assume ROA is less than 100% and that the cash balance remains positive. State the effect the following event occurring on the reporting date would have on this ratio. EVENT: An upwards revaluation of land Decrease
ROA (return on assets) is measured by Earning before interest & tax / Average total assets Assume ROA is less than 100% and that the cash balance remains positive. State the effect the following event occurring on the reporting date would have on this ratio. EVENT: An upwards revaluation of land Decrease
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![ROA (return on assets) is measured by Earning before
interest & tax / Average total assets Assume ROA is less
than 100% and that the cash balance remains positive.
State the effect the following event occurring on the
reporting date would have on this ratio.
EVENT: An upwards revaluation of land
Decrease](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5d964191-12da-4f40-a13d-1d61ae9eb6be%2F6e03bcfe-1440-4213-aee7-27fc8638e072%2Fe5a83d_processed.png&w=3840&q=75)
Transcribed Image Text:ROA (return on assets) is measured by Earning before
interest & tax / Average total assets Assume ROA is less
than 100% and that the cash balance remains positive.
State the effect the following event occurring on the
reporting date would have on this ratio.
EVENT: An upwards revaluation of land
Decrease
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