The following is an extract of Aster Inc.'s balances:

Items

Amount ($)

Opening inventory 20,000

Closing inventory 10,000

Sales

50,000

What is Aster's return-on-assets ratio?

A. 2

B.

4

C. 3

D. 5

C. 3

Explanation:

Return on Assets ratio = Net income after tax / average total assets.

Average total asset is opening total assets + ending total asset / 2

Also, inventory turn over ratio is sales / average inventory

Since no information is given on net income after tax and total assets hence Aster's return on asset ratio cannot be calculated.

His inventory turnover will be;

Average inventory = Opening inventory + Ending inventory / 2

$20,000 + $10,000 = $30,000

$30,000/2 = $15,000

Since sales is $50,000, therefore

$50,000/$15,000 = 3.3