In calculating return on assets, the simple ROA formula does not adjust for interest expense. Explain why

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In calculating return on assets, the simple ROA formula does not adjust for interest expense. Explain why is it technically more correct to make an adjustment for interest expense in calculating this ratio, and explain the form of the adjustment.

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Financial Accounting An Introduction to Concepts, Methods and Uses

ISBN: 978-1133591023

14th edition

Authors: Roman L. Weil, Katherine Schipper, Jennifer Francis

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Question Posted: Mar 04, 2014 05:42 AM

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In calculating return on assets, the simple ROA formula does not adjust for interest expense. Explain why

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The numerator in the ROA formula should reflect the ...View the full answer

Financial Accounting An Introduction to Concepts, Methods and Uses

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