A Company Had Net Income of $350,000 in Year 1

question 65

Essay

A company had net income of $350,000 in Year 1 and $520,000 in Year 2. The company had average total assets of $2,500,000 in Year 1 and $3,000,000 in Year 2. Calculate the return on total assets for Year 1 and Year 2. Comment on the results, did the company's performance improve?

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Definitions:

Account Analysis

The process of reviewing and evaluating the profitability and risks of a client's account within finance or banking.

Emotional Intelligence

The ability to recognize, understand, and manage one's own emotions and those of others, crucial in interpersonal relations and leadership.

Four Abilities

Essential skills or competencies, though context-specific, generally refer to the crucial abilities needed in a certain domain or profession.

Break-Even Point

The financial point at which total costs and total revenues are equal, meaning there is no net loss or gain, and it is a critical measure for assessing the viability of a business or project.