Peyton\'s Palace has net income of $18 million on sales revenue of $120 million.

Question

Peyton's Palace has net income of $18 million on sales revenue of $120 million. Total assets were $80 million at the beginning of the year and $98 million at the end of the year.

Calculate Peyton's return on assets, profit margin, and asset turnover ratios. (Round your answers to 2 decimal places. Omit the "%" sign in your response.)

Peyton's Palace has net income of $18 million on sales revenue of $120 million. Total assets were $80 million at the beginning of the year and $98 million at the end of the year.

Explanation / Answer

Peyton's palace Computation of Return on Assets Return On Assets = Net Income / Average total assets $ 18 /($ 80 + $ 98)/2 $ 18/ $ 89 0.20 Ratio Computation of Profit Margin Profit Margin = Net Income / Sales Revenue $ 18 / $ 120 0.15 Ratio Computation of Asset Turn over Asset Turnover = Net sales Revenue /Average total assets $ 120 / ($ 80 + $ 98)/2 $ 120 / $ 89 1.35 times

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.