On December 31, Sulfur Corporation has the following data available: Net Income

Question

On December 31, Sulfur Corporation has the following data available: Net Income Interest expense Preferred dividends Total assets at the beginning of the year Total assets at the end of the year Total stockholders' equity at the beginning of the year Total stockholders' equity at the end of the year $120,000 40,000 20,000 790,000 870,000 410,000 250,000 What is return on assets? (Round your final answer to two decimal places, XXX%) A. 30.30% B. 7.23% C. 12.05% D. 14.46% Click to select your answer Save for Later All folders are up to date. 3 Connected to Microsoft Exchang

Explanation / Answer

Answer:

Option D i.e. 14.46%

Return on Assets = Net Income / Average Total Assets
Average Total Assets = (790,000 + 870,000) / 2
Average Total Assets = $830,000

Return on Assets = 120,000 / 830,000
Return on Assets = 0.1446
or Return on Assets = 14.46%

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