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### Project [tex]$1$[/tex]

Swiss Group reports net income of [tex]$\$[/tex]28,000[tex]$ for the year. At the beginning of the year, Swiss Group had $[/tex]\[tex]$171,000$[/tex] in assets. By the end of the year, assets had grown to [tex]$\$[/tex]221,000[tex]$.

#### Questions:

1. \ \textless \ strong\ \textgreater \ What is Swiss Group's return on assets for the current year?\ \textless \ /strong\ \textgreater \
2. \ \textless \ strong\ \textgreater \ Did Swiss Group perform better or worse than its competitors if competitors average a $[/tex]9 \%[tex]$ return on assets?\ \textless \ /strong\ \textgreater \

Complete this question by entering your answers in the tabs below:

\ \textless \ strong\ \textgreater \ Return on Assets:\ \textless \ /strong\ \textgreater \

\[
\text{Return on Assets} = \frac{\text{Net Income}}{\text{Average Assets}}
\]

\ \textless \ strong\ \textgreater \ Calculations:\ \textless \ /strong\ \textgreater \

1. \ \textless \ strong\ \textgreater \ Choose Numerator:\ \textless \ /strong\ \textgreater \ $[/tex]\text{Net Income} = \[tex]$28,000$[/tex]
2. Choose Denominator: [tex]$\text{Average Assets} = \frac{\$[/tex]171,000 + \[tex]$221,000}{2} = \$[/tex]196,000[tex]$
3. \ \textless \ strong\ \textgreater \ Return on Assets:\ \textless \ /strong\ \textgreater \ $[/tex]\frac{\[tex]$28,000}{\$[/tex]196,000} = 14.29\%[tex]$

\ \textless \ strong\ \textgreater \ Group Performance:\ \textless \ /strong\ \textgreater \

- \ \textless \ strong\ \textgreater \ Return on Assets:\ \textless \ /strong\ \textgreater \ $[/tex]14.29\%[tex]$
- \ \textless \ strong\ \textgreater \ Competitors' Average Return on Assets:\ \textless \ /strong\ \textgreater \ $[/tex]9\%[tex]$

\ \textless \ strong\ \textgreater \ Conclusion:\ \textless \ /strong\ \textgreater \

- Swiss Group's return on assets is $[/tex]14.29\%[tex]$, which is better than the competitors' average return of $[/tex]9\%$.

Sagot :

GinnyAnswer
To determine Swiss Group's return on assets (ROA) and evaluate its performance relative to its competitors, we can follow these steps:

### Step 1: Determine the Average Assets

To find the average assets for the year, we need to calculate the mean of the initial and final asset values:

- Initial assets at the beginning of the year: \[tex]$171,000 - Final assets at the end of the year: \$[/tex]221,000

[tex]\[ \text{Average assets} = \frac{\text{Initial assets} + \text{Final assets}}{2} \][/tex]

[tex]\[ \text{Average assets} = \frac{171,000 + 221,000}{2} = 196,000 \][/tex]

### Step 2: Calculate the Net Income

The net income reported for the year is \$28,000.

### Step 3: Determine the Return on Assets (ROA)

ROA is calculated by dividing net income by the average assets and then multiplying by 100 to get a percentage:

[tex]\[ \text{ROA} = \left( \frac{\text{Net Income}}{\text{Average Assets}} \right) \times 100 \][/tex]

[tex]\[ \text{ROA} = \left( \frac{28,000}{196,000} \right) \times 100 \approx 14.29\% \][/tex]

### Step 4: Compare with Competitors

Competitors' average return on assets is given as 9%.

### Step 5: Evaluate Performance

To evaluate Swiss Group's performance relative to its competitors, compare the calculated ROA to the competitors' ROA:

- Swiss Group's ROA: 14.29%
- Competitors' average ROA: 9%

Since 14.29% is greater than 9%, Swiss Group performed better than its competitors.

### Summary

Swiss Group's return on assets (ROA) for the current year is approximately 14.29%. Since this ROA is higher than the competitors' average of 9%, Swiss Group performed better than its competitors.
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