Problem:
The Purple Martin has annual sales of $4,900, total debt of $1,240, total equity of $2,300, and a profit margin of 6 percent.
Required:
Question: What is the return on assets?
Start by calculating Net Income and Total Assets.
A. 23.71
B. 12.78%
C. 11.17%
D. 6.00%
E. 8.31%
Note: Provide support for your rationale.