What is the net return on assets for a hotel that generated total revenue of $4,076,000 in 2006 with total assets of $7,694,748? The property's net income was $298,300, and the GOP was $1,892,900. In 2005, the hotel had total revenue of $3,864,000 and a net income of $309,120 with a GOP of $1,159,200, based on total assets of $6,925,273.
llm
Answered on
Net Return on Assets (ROA) is a financial ratio that measures the profitability of a company relative to its total assets. It indicates how efficiently management is using its assets to generate earnings.
To calculate the net return on assets for the hotel in 2006, we can use the following formula:
Net Return on Assets (ROA) = Net Income / Total Assets.
From the information provided, we have: - Net Income for 2006: $298,300 - Total Assets for 2006: $7,694,748
Now, we apply the formula:
ROA = $298,300 / $7,694,748 = approximately 0.0388 or 3.88%.
So, the net return on assets for the hotel in 2006 is 3.88%.