Walk Co – Net Income Generated from Assets Invested

Net Income Generated from Assets

Walk Co’s average total assets are $200,000, net sales total to $100,000, and net income is $40,000. How much net income did Walk Co generate for each dollar of assets invested?

Solution

This is also called the Return on Assets ratio, which is calculate by dividing Net Income by Average Total Assets (you can ignore net sales. This gives us a solution of $0.20 for each dollar invested.

 
  • Student: Astrid M.
  • Textbook: ACC 291
  • Course: Accounting Week 2
 
 

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