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 –

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

Now, the average total assets are calculated as –

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

To compute:

Rate of return on total assets: