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Return on assets can be determined by dividing net income by average total assets. It is represented by percentage (%). It is used by the company to test the return of the company to the shareholders.

Working notes:

All the Return on Assets can be calculated by using the formula as follows:

$\begin{array}{rcl}\mathrm{Return}\mathrm{on}\mathrm{asset}& =& \frac{\mathrm{Net}\mathrm{income}}{\mathrm{Average}\mathrm{total}\mathrm{assets}}\end{array}$

Like for the year 2018

$\begin{array}{rcl}\mathrm{Return}\mathrm{on}\mathrm{asset}& =& \frac{\mathrm{Net}\mathrm{income}}{\mathrm{Average}\mathrm{total}\mathrm{assets}}\\ & =& \frac{2,4000}{22,000}\\ & =& 10.9\%\end{array}$

Working Notes:

All the profit margins on sales can be calculated by using the formula as follows:

$\text{Return}\text{on}\text{asset}=\frac{\text{Net}\text{income}}{\text{Average}\text{total}\text{asset}}$

Like for the year 2018

$\begin{array}{rcl}\mathrm{Profit}\mathrm{margin}\mathrm{on}\mathrm{sales}& =& \frac{\mathrm{Net}\mathrm{income}}{\mathrm{Sales}\mathrm{revenue}}\\ & =& \frac{2,400}{20,000}\\ & =& 12\%\end{array}$

Working Notes:

All the earnings per share can be calculated by using the formula as follows:

$\begin{array}{rcl}\mathrm{Earning}\mathrm{per}\mathrm{share}& =& \frac{\mathrm{Net}\mathrm{income}}{\mathrm{Number}\mathrm{of}\mathrm{shares}\mathrm{outstanding}}\end{array}$

Like for the year 2018

$\begin{array}{rcl}\mathrm{Earning}\mathrm{per}\mathrm{share}& =& \frac{\mathrm{Net}\mathrm{income}}{\mathrm{Number}\mathrm{of}\mathrm{shares}\mathrm{outstanding}}\\ & =& \frac{2,4000}{2,000}\\ & =& \$1.20\end{array}$

Working Notes:

All the price-earnings ratios can be calculated by using the formula as follows:

$\begin{array}{rcl}\mathrm{Price}\mathrm{earning}\mathrm{ratio}& =& \frac{\mathrm{Average}\mathrm{market}\mathrm{price}}{\mathrm{Earning}\mathrm{per}\mathrm{share}}\end{array}$

Like for the year 2018

$\begin{array}{rcl}\mathrm{Price}\mathrm{earning}\mathrm{ratio}& =& \frac{\mathrm{Average}\mathrm{market}\mathrm{price}}{\mathrm{Earning}\mathrm{per}\mathrm{share}}\\ & =& \frac{\$9}{\$1.20}\\ & =& 7.5\mathrm{times}\end{array}$

Working Notes:

All the price-earnings ratios can be calculated by using the formula as follows:

$Currentratio=\frac{Currentassets}{CurrentLiabilities}$

For Current calculating liabilities, use the following formula.

$Currentliabilities=Currentassets-Workingcapital$

Like for the year 2018

$\begin{array}{rcl}\mathrm{Current}\mathrm{liabilities}& =& \mathrm{Current}\mathrm{assets}-\mathrm{Working}\mathrm{capital}\\ & =& \$8,000-\$3,600\\ & =& \$4,400\end{array}$

$\begin{array}{rcl}\mathrm{Current}\mathrm{ratio}& =& \frac{\mathrm{Current}\mathrm{asset}}{\mathrm{Current}\mathrm{liabilities}}\\ & =& \frac{\$8,000}{\$4,400}\\ & =& 1.82\mathrm{times}\end{array}$