Return on Assets The following financial data is from Hi-Tech Instruments\' fina

ID: 2394726 • Letter: R

Question

Return on Assets
The following financial data is from Hi-Tech Instruments' financial statements (thousands of dollars, except earnings per share.)

(Thousands of Dollars)

Calculate the company's return on assets for 2016.

Round answer to one decimal place. (Ex.: 0.2345 = 23.5%)

Answer%

Compare the result to the industry average.

Hi-Tech Instruments' ratio is higher than the industry average.

Hi-Tech Instruments' ratio is lower than the industry average.

2016 Sales revenue $210,000 Cost of goods sold 125,000 Net income 9,300 Dividends 3,600 Earnings per share 4.65

ANSWER

(All Fig are in Thousands of dollars)

Return on Assets = Net Income / Average Total Assets

Net Income = $ 9,300

Average Total Assets = (Opening Total Assets + Closing Total Assets) / 2

Opening Total Assets = $167,000

Closing Total Assets = $173,500

Average Total Assets = ($167,000 + $173,500) / 2

= $170,250

Return on Assets = $9,300 / $170,250

= 5.46 %

In comparision to the industry average Hi-Tech Instruments' ratio is lower than the industry average.

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