{"id":208929,"date":"2025-04-28T08:16:10","date_gmt":"2025-04-28T08:16:10","guid":{"rendered":"https:\/\/learnexams.com\/blog\/?p=208929"},"modified":"2025-04-28T08:16:12","modified_gmt":"2025-04-28T08:16:12","slug":"nike-had-income-of-350-million-and-average-invested-assets-of-2000-million-2","status":"publish","type":"post","link":"https:\/\/www.learnexams.com\/blog\/2025\/04\/28\/nike-had-income-of-350-million-and-average-invested-assets-of-2000-million-2\/","title":{"rendered":"Nike had income of $350 million and average invested assets of $2,000 million"},"content":{"rendered":"\n<p>Nike had income of $350 million and average invested assets of $2,000 million. Its ROA is:<\/p>\n\n\n\n<p>a. 1.8%.<br>b. 35%.<br>c. 17.5%.<br>d. 5.7%.<br>e. 3.5%.<\/p>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-ast-global-color-6-color\"><strong>The correct answer and explanation is :<\/strong><\/mark><\/p>\n\n\n\n<p>To calculate Nike\u2019s Return on Assets (ROA), we use the following formula: ROA=Net&nbsp;IncomeAverage&nbsp;Invested&nbsp;Assets\u00d7100ROA = \\frac{\\text{Net Income}}{\\text{Average Invested Assets}} \\times 100<\/p>\n\n\n\n<p>Where:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Net Income<\/strong> is $350 million<\/li>\n\n\n\n<li><strong>Average Invested Assets<\/strong> are $2,000 million<\/li>\n<\/ul>\n\n\n\n<p>Now, plug the values into the formula: ROA=3502000\u00d7100=0.175\u00d7100=17.5%ROA = \\frac{350}{2000} \\times 100 = 0.175 \\times 100 = 17.5\\%<\/p>\n\n\n\n<p>Thus, the correct answer is <strong>c. 17.5%<\/strong>.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Explanation:<\/h3>\n\n\n\n<p><strong>Return on Assets (ROA)<\/strong> is a financial ratio that measures a company&#8217;s ability to generate profit from its assets. It shows how efficiently a company uses its assets to produce income. The higher the ROA, the more efficient the company is in utilizing its assets.<\/p>\n\n\n\n<p>In this case, Nike has a net income of $350 million and invested assets of $2,000 million. The ROA formula helps investors and analysts understand how well Nike is leveraging its invested assets to generate profits. The result, 17.5%, indicates that for every dollar invested in assets, Nike earns 17.5 cents in profit.<\/p>\n\n\n\n<p>This ratio is especially important for comparing the financial performance of companies within the same industry. A higher ROA usually signals better management and operational efficiency. Nike\u2019s 17.5% ROA suggests a relatively strong return on the assets it has invested in, meaning the company is performing well in terms of profitability in relation to its asset base.<\/p>\n\n\n\n<p>In contrast, if Nike\u2019s ROA were low, it might signal inefficiency, suggesting that the company isn\u2019t making the most of its assets to generate income. Therefore, understanding ROA is key in evaluating a company&#8217;s financial health and its asset utilization efficiency.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Nike had income of $350 million and average invested assets of $2,000 million. Its ROA is: a. 1.8%.b. 35%.c. 17.5%.d. 5.7%.e. 3.5%. The correct answer and explanation is : To calculate Nike\u2019s Return on Assets (ROA), we use the following formula: ROA=Net&nbsp;IncomeAverage&nbsp;Invested&nbsp;Assets\u00d7100ROA = \\frac{\\text{Net Income}}{\\text{Average Invested Assets}} \\times 100 Where: Now, plug the values into [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[25],"tags":[],"class_list":["post-208929","post","type-post","status-publish","format-standard","hentry","category-exams-certification"],"_links":{"self":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/208929","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/comments?post=208929"}],"version-history":[{"count":0,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/208929\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/media?parent=208929"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/categories?post=208929"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/tags?post=208929"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}