Answer:
Thermacare is said to have the more efficient business.
Explanation:
Return on assets (ROA) is an accounting ratio that reveals the percentage of the profitability of the assets of a firm in generating revenue.
ROA tells the amount of dollars of earnings that a company derives from each dollar of assets it has.
ROA therefore indicates the level of profitability of a firm relative to its total assets.
ROA can be calculated using the following formula:
ROA = Net income / Average total assets
From the calculated ROA using the formula above, a manager, investor, or analyst can determine how efficient the management of a firm is at employing the assets of the firm in generate earnings.
Therefore, when two companies are compared, a company that has a higher ROA is said to have a more efficient business.
Since the average 17.3% ROA of Therma Corp is higher than the average 10.1% ROA of the heating and cooling industry, Thermacare is thereforee said to have the more efficient business.