dividends and cash for fixed assets needed to maintain productivity. the cost of merchandise sold during the year was $45,000. merchandise inventories were $13,500 and $10,500 at the beginning and end of the year, respectively. accounts payable were $7,000 and $5,000 at the beginning and end of the year, respectively. The numerator of the rate earned on total assets ratio is equal to net income income before taxes income plus interest net income minus preferred dividends The numerator of the rate earned on total assets ratio is equal to: 1) net income. 2) net income minus preferred dividends. Question: The Numerator Of The Rate Earned On Total Assets Ratio Is Net Income Plus Tax Expense Net Income Plus Interest Expense Net Income Net Income Minus Preferred Dividends. The numerator of the rate earned on total assets ratio is equal to net income income before taxes income plus interest net income minus preferred dividends For example, if an asset was acquired with funds from a loan with an interest rate of 5% and the return on the associated asset was a gain of 20%, then the adjusted ROTA would be 15%. Since many newer companies have higher amounts of debt associated with their assets, This ratio can also be represented as a product of the profit margin and the total asset turnover. Either formula can be used to calculate the return on total assets. When using the first formula, average total assets are usually used because asset totals can vary throughout the year.

## This ratio indicates how well a company is performing by comparing the profit ( net income) The ability of a company to generate returns on its total assets Net Income is equal to net earnings or net income in the year (annual period) a lower ROA, as their large asset base will increase the denominator of the formula .

13 Oct 2019 The ratio inputs can be adjusted to reflect the assets' functional values while accounting for the interest rate currently being paid to a financial 17 Dec 2019 Return on assets (ROA) is a profitability ratio that measures how well a company is ROA is shown as a percentage, and the higher the number, the more efficient a Average total assets are used in calculating ROA because a is found at the bottom of the income statement is used as the numerator. 3 Apr 2019 Return on assets (ROA) is profitability ratio which measures how effectively a ROA measures cents earned by a business per dollars of its total assets. EBIT is sometimes used in the numerator because total assets are financed by a ROE equals the product of ROA and the company's equity multiplier:. Rate earned on total assets = (net income + interest expense) divided by The numerator of the rate earned on common stockholders' equity ratio is equal to

### In this module, you'll examine a systematic approach to ratio analysis and other Our denominator in the calculation is total assets, so that's fine because assets equals liabilities plus The problem is the numerator of our calculation. So, we have to add back one minus the tax rate, or 65 percent of the interest expense.

This ratio can also be represented as a product of the profit margin and the total asset turnover. Either formula can be used to calculate the return on total assets. When using the first formula, average total assets are usually used because asset totals can vary throughout the year.