Answer:
The answer is 16.23%
Explanation:
Basic Earning Power is a profitability ratio.
The purpose of this is to know how effectively a business is using its assets to generate income or sales
Basic Earning Power =
EBIT/Total asset
Total asset is $385,000
EBIT is $62,500
62,500/385,000
=0.16233
Express as a percentage =
16.23%
