A company reports the following: Net sales $4,400,000 Average total assets 2,000,000

A company reports the following:

Net sales $4,400,000
Average total assets 2,000,000

Determine the ratio of net sales to assets.

Answer:

Ratio of Net Sales to Assets   =  Net Sales ÷ Average Total Assets Ratio of Net Sales to Assets   =  $4,400,000 ÷ $2,000,000 

A company reports the following:

Net sales $1,800,000
Average total assets 1,125,000

Determine the ratio of net sales to assets.

Answer:






Ratio of Net Sales to Assets   =  Net Sales ÷ Average Total Assets
Ratio of Net Sales to Assets   =  $1,800,000 ÷ $1,125,000
Ratio of Net Sales to Assets   =  1.6 

A company reports the following income statement and balance sheet information for the current year

A company reports the following income statement and balance sheet information for the current year:

Net income $   410,000
Interest expense 90,000
Average total assets 5,000,000

Determine the rate earned on total assets.

Answer:

Rate Earned on Total Assets   = Net Income + Interest Expense Average Total Assets Rate Earned on Total Assets   = Rate Earned on Total Assets   =  $410,000 + $90,000 $5,000,000  $500,000 $5,000,000 

A company reports the following income statement and balance sheet information for the current year:

Net income $   250,000
Interest expense 100,000
Average total assets 2,500,000

Determine the rate earned on total assets.

Answer:

Rate Earned on Total Assets   =
Net Income + Interest Expense
Rate Earned on Total Assets   =
Rate Earned on Total Assets   =

$250,000 + $100,000
$2,500,000

$2,500,000
Rate Earned on Total Assets   =  14.0%