Charlie’s Construction Company is a growing construction business that has a few contracts to build storefronts in Pasay. Charlie’s balance sheet shows beginning assets of₱1,000,000 and an ending balanceof ₱2,000,000ofassets.During the current year,Charlie’s company had a net income of
₱20,000,000.Compute for the company’s return on assets and interpret the results.
Answers & Comments
Answer: Charlie's Construction Company's return on assets is 13.3333333 or 13.33% which is better for the company in order to survive.
Explanation: ROA = 20,000,000/1500000 = 13.3333333 x 100 = 13.33%