Question

Crane Company reports the following information (in millions) during a recent year: net sales, $10,177.2; net earnings, $246.7; total assets, ending, $5,130.0; and total assets, beginning, $5,150.0.

(a) Calculate the (1) return on assets, (2) asset turnover, and (3) profit margin. (Round answers to 1 decimal place, e.g. 6.2% and 6.2.)

1.		Return on assets		enter the return on assets in percentages rounded to 1 decimal places	%
2.		Asset turnover		enter the asset turnover rounded to 1 decimal places	times
3.		Profit margin		enter the profit margin in percentages rounded to 1 decimal places	%

Answer 1

.
1)	Average Assets = (beginning Assets + ending Assets)/2
	= ( $5130+5150)/2
	= $ 5140
	Return On Assets = Net Income / Average Assets
	= $246.7/5140
	=4.8 %
2)	Assets Turnover Ratio = Sales / average Assets
	= $10177.2/5140
	=2.times
3)	Profit Margin = Net Income / Sales
	= $246.7/10177.2
	=2.4 %