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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.
What is the difference between net interest margin and net spread?
net interest margin=(Income interest-Expense interest)/average earning assets net spread=Income interest/average earning assets - Expense interest/average deposits and other funds
The number of times interest charges are earned is computed as?
Type y income before income tax plus interest expense, divided by interest expense our answer here...
Where does interest expense in the income statement?
Interest expense is shown at debit side of income statement because it is an expense for business.
Is interest from fixed deposit an expense or income?
an income
Is interest income an expense asset or liability?
Interest income is part of revenue.
Is interest on fixed deposit an expense or income?
To the depositor, it is an income but to the bank or institution providing the fixed deposit as a product, it is an expense.
Is interest expense listed on the income statement as an operating expense?
yes
A company's fixed interest expense is 8000 its income before interest expense and income taxes is 32000 Its net income is 9600 The company's times interest earned ratio is?
Formula for times interest earned = earning before interest and tax / interest expense Times interest earned = 32000 / 8000 = 4 times
What is the formula for calculating interest coverage ratio?
operating income vefore interest and income taxes / annual interest expense
What is Net income divided by total assets?
debt to assets ratio
Consider that you have a small business. If you have a revenue income of Php50,000 and operating expenses of Php10,000, and interest income 0f Php5,000.00 and interest expense of Php2,000.00, how much is your net operating expense?
Consider that you have a small business. If you have a revenue income of Php50,000 and operating expenses of Php10,000, and interest income 0f Php5,000.00 and interest expense of Php2,000.00, how much is your net operating expense? What can you say about the financial position of your small business. Reason out.
