A Bank's Return on Assets (ROA) Is Calculated by Dividing

question 105

Multiple Choice

A bank's return on assets (ROA) is calculated by dividing:

• A) the bank's assets by its net worth.
• B) the bank's net profits after taxes by its assets.
• C) the bank's net worth by its assets.
• D) the bank's assets less its net profit after taxes by its net worth.

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Definitions:

Overhead Rate

The rate at which indirect costs are allocated to produced goods or services.

Direct Labor Dollar

The total cost of wages paid to workers who are directly involved in the production of goods or delivery of services.

Rent Expense

The cost incurred for leasing or renting property or equipment, considered an operating expense in accounting.

Supervision Expense

Supervision expense refers to the cost associated with overseeing and managing workers or operations within a business.