Question

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

balance of ₱2,000,000 of assets. 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.​

Answer 1

Answer:

• 46463 will be the answer to the question

Explanation:

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Answer 2

Answer:

Charlie’s has a growing construction business that has a few contracts to build storefronts in Pasay.

In, Charlie’s balance sheet it shows beginning assets of ₱1,000,000 and an ending balance of ₱2,000,000 assets. During the current year, Charlie’s company had a net income of ₱20,000,000.

Return on Assets ratio=

                        net income/(opening balance + closing balance)/2

                                        $20,000,000/ 1500000 = 13.333%$%

Charlie invested in assets during the year and produced $13.3 of net income on money invested. Depending on the investment and return on asset ratio, this can be a healthy return rate it doesn't matter what is the investment is.

              Investors would have to compare Charlie’s return with other construction companies or firms in his industry to get a true understanding and knowledge of how well Charlie is managing his assets.

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