Relationships among Return on Assets, Return on Sales, and Asset Turnover A company’s return on assets is a function of its ability to turn over its investment (asset turnover) and earn a profit on each dollar of sales (return on sales). For each of the following independent cases, determine the missing amounts. (Note: Assume in each case that the company has no interest expense; that is, net income is used as the definition of income in all calculations.)

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Case 1 Net income $10,000 Net sales $80,000 Average total assets $60,000 Return on assets ? Case 2 Net income $25,000 Average total assets $250,000 Return on sales 2% Net sales ? Case 3 Average total assets Asset turnover Return on sales Return on assets Case 4 Return on assets Net sales Asset turnover Net income $80,000 1.5 times 6% ? 10% $50,000 1.25 times ?