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The balance sheet of paradise pizza reports total assets of $1,500,000 and $1,700,000 at the beginning and end of the year, respectively. net income and sales for the year are $240,000 and $2,000,000, respectively. what is paradise pizza's return on assets?

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meerkat18

The return on asset is the measure of how a company’s assets are able to produce profits during a certain business period. It is computed by dividing the net income by the average asset. $240,000 divided by (beginning assets $1,500,000 plus ending asset $1,700,000 divided by 2), equals return on asset of 15%.

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