FOR 2011: If the average ROA for this industry is 12%, is this company getting a

Question

FOR 2011: If the average ROA for this industry is 12%, is this company getting a good return on Assets?

2011 ROA: -5.6%

a) Yes, because the ROA is positive.
b) Yes, because they are generating a return.
c) Yes, because the ROA is higher this year than last year.
d) No, because the ROA is far below the 12% industry average.
e) No, because Return on Assets doesn't apply to a game design company
f) No, because the ROA is lower than the company's Return on Equity

FOR 2012: If the average ROA for this industry is 12%, is this company getting a good return on Assets?

2012 ROA: 1.384%

a) Yes, because the ROA is positive.
b) Yes, because the ROA went from negative to positive.
c) No, because the ROA is far below the 12% industry average.
d) No, because Return on Assets doesn't apply to a software company.

Explanation / Answer

ROA of -5.6 % is much less than industry average of 12%. Hence d) No, because the ROA is far below the 12% industry average is the most apt option

For 2012:
c) No, because the ROA is far below the 12% industry average.

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