Asked by
Kathleen Meverden
on Dec 17, 2024
Verified
When net income before taxes and interest is $86,000 and total assets equal $234,000, the rate of return on total assets is 36.8%.
Return on Total Assets
A profitability ratio that measures the net income earned on total assets available within a company.
Net Income Before Taxes
This refers to the amount of revenue remaining after all operating expenses, interest, and depreciation have been subtracted, but before taxes are deducted.
- Familiarize oneself with the connection between financial ratios and the operational performance of a business, particularly in managing assets, liabilities, and profits.
- Examine how financial ratios impact the decision-making and performance evaluation practices of companies.
Verified Answer
MH
Learning Objectives
- Familiarize oneself with the connection between financial ratios and the operational performance of a business, particularly in managing assets, liabilities, and profits.
- Examine how financial ratios impact the decision-making and performance evaluation practices of companies.
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