The rate of return on assets ratio is computed by dividing net income and interest expense, net

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The rate of return on assets ratio is computed by dividing net income and interest expense, net of tax, by average total assets. Why is the numerator net income and interest expense, net of tax, rather than just net income?

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Using Financial Accounting Information The Alternative to Debits and Credits

ISBN: 978-1133161646

7th Edition

Authors: Gary A. Porter, Curtis L. Norton

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Question Posted: Jan 12, 2012 02:09 AM

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The rate of return on assets ratio is computed by dividing net income and interest expense, net

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Using Financial Accounting Information The Alternative to Debits and Credits

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