A Company Had Net Income of $450,000 in 2009 and $620,000

question 145

Essay

A company had net income of $450,000 in 2009 and $620,000 in 2010.The company had average total assets of $2,500,000 in 2009 and $3,000,000 in 2010.Calculate the return on total assets for 2009 and 2010.Comment on the results.

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Definitions:

Appraisers

Professionals who estimate the value of property, such as real estate or fine art, often used for tax, insurance, or sale purposes.

Earnings per Share

A company's profit divided by its number of outstanding shares of stock, indicating the portion of a company's profit allocated to each share.

Cost of Debt

The effective rate that a company pays on its total debt, serving as a measure of the risk and a way to gauge the company's ability to manage its debt effectively.

Shares Outstanding

The total number of shares of a company’s stock that are currently owned by all its shareholders.