Assume you are given the following information for Flanders Company: Return on Assets (ROA): 11% Return on Equity (ROE): 20% Total Asset Turnover : 1.5x Calculate the Return of Sales for Flanders Company. Solution Return on Assets = Net Income / Assets Net Income = .11 Assets Asset = Net Income/.11 Return on Equity = Net Income/ Shareholders Equity Net Income = .20 Shareholders Equity Total asset turnover = Sales/ Assets Sales = 1.5 Assets Sales = 1.5*net income/.11 Net Income = Sales *.073 Return on Sales = Net Income/ Sales = .073 Sales / Sales Return on sales = 7.3%.