Question

1.       The return on assets (ROA) for XYZ Hospital Systems Inc, below, for the year 20XX was

a.       18.07%

b.       23.38%

c.       100%

d.       cannot be determined

XYZ Hospital Systems, Inc
Assets
Cash	7,100,000.00
Investments	500,000.00
Inventories	50,000.00
Net Accounts receivable	5,000,000.00
	12,650,000.00
Fixed assets:
Property and equipment	50,000,000.00
Leasehold improvements	500,000.00
Less accumulated depreciation	(10,000,000.00)
Total fixed assets	40,500,000.00
Total assets	53,150,000.00
Liabilities and owner's equity
Current liabilities:
Accounts payable	250,000.00
Accrued wages	400,000.00
Unearned revenue	50,000.00
Total current liabilities	700,000.00
Long-term liabilities:
Mortgage payable	40,000,000.00
Total long-term liabilities	40,000,000.00
Total Liabilities	40,700,000.00
Owner's equity:
Capital Contributions	50,000.00
Accumulated retained earnings	12,400,000.00
Total owner's equity	12,450,000.00
Total liabilities and owner's equity	53,150,000.00

Answer 1

Answer : D) Cannot be Determined

From the Given information it is not possible to Calculate the return on Asset as We Require Net income Value.

ROA = Net Income / Average Assets