An investment center of Aguilar Corporation shows an operati

An investment center of Aguilar Corporation shows an operating income of $6,669 on total operating assets of $57,000.

Compute the return on investment. (Round your answer to 2 decimal places. (i.e., .2345 should be entered as 23.45).)

Solution

Given that:

             operating income(Net income)=$6,669

              total operating assets=$57,000

Return on assets gives an idea as to how efficient management is at using its assets to generate earnings. Calculated by dividing a company\'s annual earnings by its total assets, return of assets is displayed as a percentage. Sometimes this is referred to as return on investment.

The formula for return on assets (return on investment) is: Net income / Total assets

                                                                                    =6669/57000

                                                                                    =0.117 percent

                                                                                    =11.7

                                   Return on investment = 11.7