Question

A company's financial statements show the following: • Net Income: ₹40 lakh • Interest Expense: ₹10 lakh • Tax Rate: 25% • Total Assets: ₹300 lakh • Current Liabilities: ₹50 lakh Calculate the Return on Assets (RO

  • A and interpret the result.
A 13.33% – Good return on asset base
B 12% – Indicates average asset utilization
C 20% – Highly efficient firm
D 8.33% – Low profitability
E 10% – Optimal performance
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