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Papa John’s is one of the fastest-growing pizza delivery and carry-out restaurant chains in the country. Presented here are selected income statement and balance sheet amounts (dollars in thousands). Current Year Prior Year Net sales $ 1,242,087 $ 1,242,087 Net income 51,796 22,735 Average shareholders' equity 121,445 134,536 Average total assets 390,143 397,728 Required: 1. Compute ROA for the current and prior years. (Round your answers to 3 decimal places.)

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Answer and Explanation:

The computation of the return on assets for the current and prior years are as follows:

As we know that

Return on assets = Net income ÷ average total assets

For current year

= $1,242,087 ÷ $390,143

= 3.184

And, for the prior year

= $1,242,087 ÷ $397,728

= 3.123

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