Financial Accounting: Information for Decisions
Financial Accounting: Information for Decisions
9th Edition
ISBN: 9781260158809
Author: Wild, John
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter C, Problem 15QS
Summary Introduction

Concept Introduction:

Return on assets/investment is a profitability ratio that represents the percentage return on the investment made. It is calculated by dividing the Net Income by the Average total assets. The formulas to calculate the ROI are as follows:

  ROI= Operating income  ÷Average total assets

To calculate:the return on total assets for years 2 and 3 and comment on the efficiency of the company to use its assets.

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