Relationships among Return on Assets, Return on Sales, and Asset Turnover A comp
ID: 2720195 • Letter: R
Question
Relationships among Return on Assets, Return on Sales, and Asset Turnover
A company's return on assets is a function of its ability to turn over its investment (asset turnover) and earn a profit on each dollar of sales (return on sales).
Required:
For each of the following independent cases, determine the missing amounts. (Note: Assume in each case that the company has no interest expense; that is, net income is used as the definition of income in all calculations.) Round to the nearest whole number.
$?????
Case 1 Net income $15,200 Net sales $103,400 Average total assets $95,000 Return on assets %????? Case 2 Net income $19,000 Average total assets $172,300 Return on sales 8% Net sales$?????
Case 3 Average total assets $84,000 Asset turnover 1 times Return on sales 6% Return on assets %????? Case 4 Return on assets 13% Net sales $157,500 Asset turnover 1.75 times Net income $??? Case 5 Return on assets 19% Net income $12,350 Return on sales 6% Average total assets $?????Explanation / Answer
Relationships among Return on Assets, Return on Sales, and Asset Turnover A comp