Flitter reported net income of $25,000 for the past year. at the beginning of the year the company had $215,000 in assets and $65,000 in liabilities. by the end of the year, assets had increased to $315,000 and liabilities were $90,000. calculate its return on assets:

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Business

Calvin Garcia

26 April, 22:52

Flitter reported net income of $25,000 for the past year. at the beginning of the year the company had $215,000 in assets and $65,000 in liabilities. by the end of the year, assets had increased to $315,000 and liabilities were $90,000. calculate its return on assets:

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Dominick Hughes · Answer 1

Capital at 1/1=215,000-65,000

=150,000

Capital at 31/12 = 315,000-90,000

=225,000

Net income for the current year

225,000-150,000=75,000

Return on assets

75,000:315,000=0.238*100=23.8%