Assume Metro Corporation had a net income of $ 2,200 for the year ending December 2018. Its beginning and ending total assets were $ 31,500 and $ 20,500 , respectively. Calculate Metro's return on assets (ROA). (Round your percentage answer to two decimal places.)

Question

Business

Andrew Lang

28 August, 00:08

Assume Metro Corporation had a net income of $ 2,200 for the year ending December 2018. Its beginning and ending total assets were $ 31,500 and $ 20,500 , respectively. Calculate Metro's return on assets (ROA). (Round your percentage answer to two decimal places.)

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Answers (1)

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Jordin Weaver · Answer 1

The return on assets is 8.4%

Explanation:

In order to calculate the return on assets we will first need to find the average total assets. We will do this by adding the beginning and ending total assets and dividing it by 2.

Average total assets = (31,500+20,500) / 2 = 26.000

Now in order to find the return on assets we will divide the net income by the average total assets.

Return on assets = 2,200/26,000=0.084=8.4%