1. Pollux
Company had the following income statement for last year:
Beginning assets were $565,000 and ending assets were
$597,000.
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Question A.
Average operating assets = (Opening Assets + Closing assets)/2
Average operating assets = (565,000+597,000)/2
Average operating assets = $581,000
Question B.
Margin is the percentage of profit to sales. Gross profit margin is the ratio of gross profit to sales. Operating profit margin is the ratio between operating income to sales.
Gross profit margin = (Gross profit/Sales)*100
Gross profit margin = (165,000/360,000)*100
Gross profit margin = 45.83%
Operating profit margin = Operating profit / Sales*100
Operaring profit margin = 86,400/360,000*100 = 24%
Question C.
Turnover means total revenue from sales or provision of service. In this example, turnover is $360,000.
Question D.
Return on investment (ROI) =Profit/Average investment
Return on investment (ROI) = 86,400/581,000
Return on investment (ROI) = 14.87%
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