The following information pertains to Whispering Winds Corp.. Assume that all ba
ID: 2340252 • Letter: T
Question
The following information pertains to Whispering Winds Corp.. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit. Assets Cash and short-term investments Accounts receivable (net) Inventory Property, plant and equipment Total Assets 54000 51000 40000 241000 386000 Liabilities and Stockholders' Equity Current liabilities Long-term liabilities Stockholders' equity-commorn Total Liabilities and Stockholders' Equity $52000 81000 253000 $$386000 Income Statement Sales revenue Cost of goods sold Gross profnt Operating expenses Net income 91000 52000 39000 17000 $22000 Number of shares of common stock Market price of common stock Dividends per share on common stock 20000 $ 20 10Explanation / Answer
Winds corp. Total average assets = $ 386,000
Winds corp. Net Income for the period = $ 22,000
Return on assets = Total average assets ÷ Net income
= $ 386,000 ÷ $ 22000
= 5.7 %
Therefore, ROA= 5.7%
This means for every $ in assets, winds corp. earned 5.7 cents profit.
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