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Is the return on assets ratio computed by dividing net income by total assets?
Wiki User
∙ 9y ago
Yes it is the formula for calculating return on total assets as follows:
Return on total asssets = Net income / total assets * 100
Wiki User
∙ 9y ago
Wiki User
∙ 9y agoYes, return on assets means how much income is generated using assets.
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What is the return on total assets ratio?
Answer:Return on total assets (ROA) equals net income divided by total assets. It is a measure of performance, because the amount that is earned with the assets is divided by the value of the assets (investments). AlternativeInstead of dividing net income by assets, often the interest expense is added back to net income. An alternative measure is thefore:ROA = NOPAT / total assetswhere NOPAT is net operating profit after tax, which is computed as net income plus the interest expense x ( 1 - tax rate).NOPAT shows the profitability of all assets (excluding the cost of financing), but including the 'tax shield' on the interest expense (because interest expense is tax deductable).This is considered to be more precise than dividing net income by assets.Return on equityReturn on equity is a similar ratio, where net income is divided by shareholders' equity. It shows the percentage return that the company has made on its equity.
How do you Compute return on assets if total assets where 500000 dollars and net income was 26000 dollars?
Return on total asset = Net Income / Total Assets return on total assets = 26000 / 500000 * 100 Return on total assets = 5.2%
What is its net income if a firm has an Return of total assets of 12 percent sales of 1500 and total assets of 1275?
Net income = total assets * return on total assets. net income = 1275 * 0.12 = 153
Doherty Corporation had net income of 30000 net sales of 1000000 and average total assets of 500000 It's return on total assets is?
Return on total assets = net income / total assets *100 Return on total assets = 30000 / 500000 * 100 = 6%
How do you calculate return on assets?
Net Income divided by Average Total Assets
What are the Average Rate of Return ARR?
Average rate of return = Net Income / Average Assets Average assets = (opening assets - closing assets) / 2
What does return on assets mean?
Return on assets (or ROA) means how profitable a company is based on their total assets. The ROA is calculated by dividing a companies total earnings by it's total assets. It is often also called return on investment.
return on assets?
this profitability ratio shows how much income is contributed by assets of a company. generally, assets contribute a majority of income earned. ROA is calculated using the following formula:Return on assets = (Net income / Total assets) x 100
Is calculated by dividing the net income by revenue or sales?
return on sales
What is the net income when A firm has an Return of Assets of 12 percent sales 1500 total assets of 1275?
Return on asset = 1275 * 12% Return on asset = 153
What is the net income if a company has a debt equity ratio of 1.40 return on assets is 8.7 percent and total equity is USD520000?
Return on assets is Net income/ total assets. Hence to arrive at net income we should ascertain total assets first, as the return on assets is provided at 8.7%. Total assets is sum of Equity plus Debt plus Other liabilities. We have total equity at USD 520000. Hence debt can be ascertained from the Debt Equity ratio at 1.40. But what about other liabilities? As it is not provided we will not be able to compute total assets and hence net income from the given particulars.
Return on assets ratio pyramid showing primary secondary and tertiary ratios?
Primary ratio = Net income/Total assets
