Shivam Enterprises reported a profit after tax of Rs.3,80,000 for the financial year. The average total assets of the company during the year were Rs.12,50,000. Calculate the Return on Assets (ROA) as a percentage, rounded to one decimal place.

Step-by-step solution

1. Identify the numerator – profit after tax ($380000$).
2. Identify the denominator – average total assets ($1250000$).
3. Divide profit by assets: $380000÷1250000=0.304$.
4. Convert to percentage: $0.304\times 100=30.4\%$.
5. Round to one decimal place: $30.4\%$.
6. Thus the ROA is 30.4 %.
7. This ratio shows how efficiently assets are used to generate profit.

Concept tested: Profitability ratio – ROA

Published 28 September 2026 · How this solution was prepared and checked