You have reported a net income of $30,000 for the past year. At the beginning of the year, the company had $250,000 in assets and $75,000 in liabilities. By the end of the year, assets had increased to $350,000 and liabilities were $90,000. Calculate its return on assets.

You have reported a net income of $30,000 for the past year. At the beginning of the year, the company had $250,000 in assets and $75,000 in liabilities. By the end of the year, assets had increased to $350,000 and liabilities were $90,000. Calculate its return on assets.

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter7: Analysis Of Financial Statements

Section: Chapter Questions

Problem 12P: The Kretovich Company had a quick ratio of 1.4, a current ratio of 3.0, a days’ sales outstanding of...

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Question

Please explain this financial accounting problem with accurate financial standards.

You have reported a net income of $30,000 for the past year.
At the beginning of the year, the company had $250,000 in
assets and $75,000 in liabilities. By the end of the year, assets
had increased to $350,000 and liabilities were $90,000.
Calculate its return on assets.

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