Asked by autumn hager on Jun 25, 2024
Verified
A company had net income of $43,000,net sales of $380,500,and average total assets of $220,000.Its profit margin and total asset turnover were,respectively:
A) 11.3%; 1.73.
B) 11.3%; 19.5.
C) 1.7%; 19.5.
D) 1.7%; 11.3.
E) 19.5%; 11.3.
Profit Margin
Profit Margin indicates the percentage of revenue that remains as profit after all expenses are deducted, showcasing a company's efficiency in generating profit from sales.
Net Income
Net income is the total profit of a company after all expenses, taxes, and costs have been deducted from its total revenue.
- Comprehend financial measures like profit margin, total asset turnover, and return on total assets.
Verified Answer
EC
Elizabeth Calleja GarciaJun 26, 2024
Final Answer :
A
Explanation :
Profit margin = net income/net sales
Profit margin = 43,000/380,500
Profit margin = 0.113 or 11.3%
Total asset turnover = net sales/average total assets
Total asset turnover = 380,500/220,000
Total asset turnover = 1.73
Therefore, the correct choice is A.
Profit margin = 43,000/380,500
Profit margin = 0.113 or 11.3%
Total asset turnover = net sales/average total assets
Total asset turnover = 380,500/220,000
Total asset turnover = 1.73
Therefore, the correct choice is A.
Learning Objectives
- Comprehend financial measures like profit margin, total asset turnover, and return on total assets.
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