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Horngren'S Financial And Managerial Accounting
Found in: Page 567

Short Answer

What does the rate of return on total assets measure, and how is it calculated?

The rate of return on total assets calculates the ability of the company to generate income using its assets. It is calculated using the average total assets, net income, and interest expenses.

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Step by Step Solution

Definition of Average Total Assets

Average total assets can be defined as average assets maintained by the business during the year. It is calculated by taking an average of ending and beginning assets.

Definition of Average Total Assets

Average total assets can be defined as average assets maintained by the business during the year. It is calculated by taking an average of ending and beginning assets.

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