Afire has destroyed a large percentage of the financial records of the excandesco company. you have the task of piecing together information in order to release a financial report. you have found the return on equity to be 16.3 percent. sales were $1,785,000, the total debt ratio was .33, and total debt was $658,000. what is the return on assets (roa)

The return on assets (ROA) of Excandesco Company is 10.921%

Explanation:

Return on assets (ROA) helps an investor see how much after-tax profit a company gained for each dollar in assets, is calculated by formula:

ROA = Net Income/ Total Assets

The total debt ratio of Excandesco was .33:

Total debt ratio = Total Debts/ Total Assets = 0.33

Total debts = 0.33 x Total Assets

From the accounting equation: Total Assets = Total debts + Total Equity

Total Equity = 0.67 x Total Assets

Excandesco Company had return on equity (ROE) of 16.3 percent.

ROE = Net income/ Equity

Net income = ROE x Equity = 16.3% x 0.67 x Total Assets = 0.10921 x Total Assets.

ROA = Net Income/  Average Total Assets = (0.10921 x Total Assets)/Total Assets = 0.10921 = 10.921%