The Rate of Return on Total Assets Is Calculated by Subtracting

question 84

True/False

The rate of return on total assets is calculated by subtracting interest expense from net income and dividing it by average assets.

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Definitions:

Net Operating Profit After Taxes (NOPAT)

NOPAT is a measure of a company's operating efficiency, indicating the profit generated from operations after taxes but before financing costs and non-operating gains and losses.

Shareholders' Equity

The owners' equity in a corporation, calculated as the company's total assets minus its total liabilities.

Corporate Tax Liability

The total amount of taxes owed by a corporation based on its taxable income.

Projected Taxable Income

An estimate of an entity's income for a fiscal period that is subject to income tax.