Asked by Mackenzie Magaoay on Apr 27, 2024
Verified
Danny's Dog Delivery has total assets of $975, sales of $989, net profit after taxes of $56, and operating income of $576. Which of the following is the return on assets ratio for this business?
A) 0.057
B) 0.591
C) 0.986
D) 1.01
Return on Assets Ratio
A financial metric that measures how profitable a company is in relation to its total assets, indicating how efficient management is at using assets to generate earnings.
Total Assets
The summation of all the company's assets, including those that are tangible and intangible, which are owned and can provide economic value.
Net Profit
The financial gain remaining after subtracting all expenses, taxes, and costs from total revenue, indicating the overall profitability of a business.
- Examine a company's economic performance by utilizing profitability ratios.
Verified Answer
Learning Objectives
- Examine a company's economic performance by utilizing profitability ratios.
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