Question

Please calculate the following based on the facts provided:   a. Gross Margin Ratio: Net sales =...

Please calculate the following based on the facts provided:

  a. Gross Margin Ratio: Net sales = $1,000,000.00 & Cost of Goods Sold = $200,000.  

  b. Return on assets ratio (ROA): Net Income = $350,000 & Average Total Assets = $2,500,000

  c. Return on Equity (ROE): Net Income = $350,000 & Shareholder's Equity = $5,000,000.

  d. Customer Acquisition Cost (CAC): Sales/Marketing Costs = $450,000 & number of new customers 1,000.

   e. Current Liquidity Ratio: Current Assets = $1,200,000 & Current Liabilities= $750,000

   f. Quick Liquidity Ratio (aka Acid Test Ratio): Total Current Assets = $1,300,000, Inventory = $175,000 & Current Liabilities = $600,000.

   g. Debt to Equity Ratio: Total Liabilities = $650,000 & Total Equity = $1,700,000.

Homework Answers

Answer #1

a. Gross margin ratio = gross profit /sale

=(1,000,000-200,000)/1,000,000

=800,000/1,000,000

=80.00%

b return on assets= net income / average total assets

=350,000/2,500,000

=24.00%

C. Return in Equity = Net income / total stockholders equity

=350,000/5,000,000

=7.00%

D. Customer acquisition cost = (sales/ marketing cost )/ number of customer

=450,000/1000= 450.00

E. Current liquidtiy ratio = current assets / current liquidtiy

=1,200,000/750,000= 1.60

F. Current liquidtiy ratio = (Total current assets - inventory )/ current liability.

= (1,300,000- 175,000)/600,000

=1,125,000/600,000

=1.8750 or 1.88

G. Debt to equity ratio = Total debt / Total equity

= 650,000/1,700,000

= 38.24%

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