Hometown Resources, Inc. has a 9% rate of return on total assets and the industry average is 12%. How was the 9% rate of return on total assets computed? Comment on this information
What will be an ideal response
The 9% percent rate of return is computed by dividing net income plus interest expense by average total assets. For each $1.00 invested in its average assets, Hometown earned $0.09 in profits before considering interest expense. This is $0.05 below the industry average. Hometown needs to evaluate its average assets and net income to see where improvements can be made.
You might also like to view...
In high context cultures, the primary role of communication is to build relationships, not exchange information
Indicate whether the statement is true or false.
Measuring the dilation of a person's pupil to measure attention to an advertisement is a technique used in:
A) informal research. B) clinical research. C) descriptive research. D) observational research.
Focus groups can be used to address substantive issues such as ________
A) defining a problem more precisely B) generating new ideas about older products C) developing an approach to a problem D) interpreting previously obtained quantitative results
Most firms report the amounts in their financial statements using _____
a. Euro's b. United States Dollars c. Japanese Yen d. currency of the country where they are incorporated and conduct most of their business activities e. Swiss Francs