A 9% Rate of Return on Total Assets Means That

question 9

True/False

A 9% rate of return on total assets means that the company earned $0.09 for each $1.00 invested in the company's average long-term assets.

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Definitions:

Net Income

The amount of money remaining from revenues after subtracting all costs, expenses, and taxes, indicating the profit earned.

Dividends

Payments made by a corporation to its shareholder members, distributed from the company's profits.

Note Payable

A written agreement where one party promises to pay another a definite sum of money at a specified future date or on demand.

Current Assets

Assets likely to be converted into cash within a year, such as inventory, accounts receivable, and cash and cash equivalents.