QPark reported $860,000 of operating income and $750,000 of net income. The inco
ID: 2476408 • Letter: Q
Question
QPark reported $860,000 of operating income and $750,000 of net income. The income tax rate is 30 percent. Below are selected accounts and amounts (in thousands) from QPark’s financial statements for the year ending December 31:
Sales revenue
$ 8,500
Equipment
$20,400
Interest expense
300
Long-term debt
3,600
Retained earnings
14,000
Income taxes payable
1,100
Common stock
12,000
Total assets
45,400
Calculate the return on assets for QPark. Explain what information this ratio provides for investors.
Sales revenue
$ 8,500
Equipment
$20,400
Interest expense
300
Long-term debt
3,600
Retained earnings
14,000
Income taxes payable
1,100
Common stock
12,000
Total assets
45,400
Explanation / Answer
Return on assets = Net Income / Total Assets = 750000/45400 = 16.52 It measure how effectively a company can earn a return on its invested assets
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.