   Chapter 9, Problem 9.4.14P

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Textbook Problem

Twenty metrics of liquidity, solvency, and profitabilityThe comparative financial statements of Automotive Solutions Inc. are as follows. The market price of Automotive Solutions Inc. common stock was $119.70 on December 31, 20Y8   InstructionsReturn on total assets To determine Concept Introduction: Return on total Assets: The Return on total assets is profitability ratio that measures the percentage of profit earned on average assets invested in business. Return on asset is calculated by dividing the net income by average total assets. The formula to calculate Return on assets is as follows: Return on assets = Net incomeAverage Total Assets Note: Average total assets are calculated as an average of beginning and ending total assets. The formula to calculate the average total assets is as follows: Average total Assets = (Beginning total assets + Ending total assets)2 To Calculate: The returns on total assets. Explanation The Return on Total Assets is calculated as follows:  20Y8 Net Income (A)$ 900,000 Beginning Total Assets (B) \$ 8,755,0...

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