What is the return on total assets if there is a net profit (after taxes) of $16,000 and total assets of $48,000?

To calculate the return on total assets (ROA), you divide the net profit after taxes by the total assets. In this scenario, you have a net profit of $16,000 and total assets of $48,000.

The formula for ROA is:

[ \text{ROA} = \frac{\text{Net Profit}}{\text{Total Assets}} ]

Substituting the values into the formula gives:

[ \text{ROA} = \frac{16,000}{48,000} ]

When you perform the division:

[ \text{ROA} = \frac{16}{48} = \frac{1}{3} ]

This means that for every dollar invested in total assets, the company earns approximately 33.33 cents in profit. This ratio indicates how effectively a company is using its assets to generate earnings. A return of one-third suggests a reasonable level of asset efficiency, which is a positive sign of operational performance.