Chapter 1, Problem 16QS

To determine

Concept Introduction:

Return on assets:

Return on total assets can be defined as the ratio that measures a company's net income against its total net assets or average total assets.

Rate of Return on total assets can be calculated as −

$\text{Return on Total Assets}=\frac{\text{Net Income}}{\text{Average Total assets}}$

Now, the average total assets are calculated as −

$\text{Average total assets}=\frac{\text{Beginning Total assets}+\text{Ending total assets}}{2}$