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Firm J has net income of $64,050, sales of $915,000, and average total assets of $381,250
Firm J has net income of $64,050, sales of $915,000, and average total assets of $381,250.
Required:
Calculate Firm J’s margin, turnover, and return on investment (ROI).
Margin:= Net income/Sales=Margin=
Turnover:=Sales/Average total assets=
Return on Investment =Net income/Average total assets=Return on Investment=
Expert Solution
Answer:
Margin = 0.07 or 7%
Turnover = 2.4
Return on Investment = 0.168 or 16.8%
Workings:
Margin = Net Income/Sales = $64050/$915000 = 0.07
Or 64050/915000*100 = 7%
Turnover = Sales/Average total assets = $915000/$381250 = 2.4
Return on Investment = Net Income/Average total assets =$64050/$381250 = 0.168
Or 64050/381250*100 = 16.8%
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