Question

    RST Ltd’s has the following information Sales

    = 300000 Cost of Goods Sold = Rs 140000 Pre-Interest Operating Expenses = Rs 30000 Interest Expenses = Rs 10000 Tax rate = 20% Average total assets = Rs 1000000 What is RST Ltd’s Return on Assets?
    A 22% Correct Answer Incorrect Answer
    B 12% Correct Answer Incorrect Answer
    C 9.6% Correct Answer Incorrect Answer
    D 10.6% Correct Answer Incorrect Answer
    E 11.6% Correct Answer Incorrect Answer

    Solution

    Return on Assets = Net Income/Average Total Assets (Net Income = Sales – COGS – Pre-Interest Operating Expenses – Interest Expenses -Tax expenses)/Average Total Assets {(300000-140000- 30000-10000) @80%}/1000000             9.6%       

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