Torrid Romance Publishers has total receivables of $3,000, which represents 20 d

Question

Torrid Romance Publishers has total receivables of $3,000, which represents 20 days%u2019 sales. Total assets are $75,000. The firm%u2019s operating profit margin is 5%. Find the firm%u2019s asset turnover ratio and ROA. (Use 365 days in a year. Do not round intermediate calculations. Round your answers to 2 decimal places.)

Asset turnover ratio

ROA

Torrid Romance Publishers has total receivables of $3,000, which represents 20 days%u2019 sales. Total assets are $75,000. The firm%u2019s operating profit margin is 5%. Find the firm%u2019s asset turnover ratio and ROA. (Use 365 days in a year. Do not round intermediate calculations. Round your answers to 2 decimal places.)

Explanation / Answer

Total sales = 3000 * 365/20 = 54750

Assest turnover ratio = 54750 / 75000 = 0.73

ROA = assest turnover * profit margin = 0.73 * 5% = 3.65%

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

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