What is the return on assets ratio


Problem:

                                                            2006                                        2005

Accounts Receivable                          $267,500                                 $230,000

Inventory                                         $312,500                                 $257,500

Total Current Assets                          $670,000                                 $565,000

Intangible Assets                                 $50,000                                   $60,000

Total assets                                       $825,000                                 $695,000

Current Liabilties                                  $77,500                                   $75,000

Sales                                               $1,640,000     

Cost of goods sold                              $982,500                                

Interest expense                                  $10,000          

Income tax expense                            $77,500

Net Income                                         $127,500

Cash Flow from operations                     $71,000

Cash Flow from investing activities         $(6,000)

Cash flow from financing activities             30%

Question 1: What is the return on assets ratio for 2006?

Question 2: What is the current ratio for 2006?

Question 3: What are the accounts receivable turn over for 2006?

Question 4: What is the inventory turnover for 2006 (how many times?)

Question 5: What is the long-term debt to assets for 2006?

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Finance Basics: What is the return on assets ratio
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