Could somebody show me how to calculate return on assets?

Question

Compute and interpret Home Depot's return on assets (assume competitors average a 12% return on assets)

SALES $90,837 million

NET INCOME $5,761 million and Average total assets $48,334 million

Answer 1

You need to use the annual numbers to arrive at ROA.  Their financial year ended Feb 3, 2008.  Total reported assets were 44,324 billion.  Net reported income was 4,395 billion.  4395/44324 = 9.9% for 2007. But for the trailing 12 months, you will arrive at a different number.

Net trailing 12 months income = 3,705 billion.  Last quarter's reported assets = 45,596 billion  3705/ 45596 = 8.1%