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Select Co. had the following 1994 financial statement relationships:
Asset turnover 5
Profit margin on sales 0.02
What was Select's 1994 percentage return on assets?
A. 0.4 percent.
B. 10.0 percent.
C. 0.1 percent.
D. 2.5 percent.
Answer: B
Explanation:
Choice "d" is correct. Return on assets equals income divided by average assets. This formula can be
further divided into the components of profit margin times asset turnover (referred to as the Dupont
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Choices "a", "b", and "c" are incorrect, per the above calculation.
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D. Processed
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F. Partially approved
G. Closed
H. Submitted
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