Horngren's Accounting (11th Edition)
Horngren's Accounting (11th Edition)
11th Edition
ISBN: 9780133856781
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
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Chapter 15, Problem 10QC
To determine

Concept Introduction:

Rate of Return on total assets: Rate of Return on total assets can be defined as the ratio that measures a company’s earnings before interest and taxes (EBIT) against its total net assets or average total assets.

Rate of Return on total assets can be calculated as –

Rate of Return on Total Assets= Net IncomeAverage Total assets

Now, the average total assets are calculated as –

Average total assets=Beginning Total assets+Ending total assets2

To compute:

Rate of return on total assets:

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