Homework: Chapter 4 Homework Score: 0 of 5 pts Problem 4-7 (similar to) (Analyzi
ID: 2811857 • Letter: H
Question
Homework: Chapter 4 Homework Score: 0 of 5 pts Problem 4-7 (similar to) (Analyzing operating retum on assets) The D. A Winston 4 of 8(2 MN Score: 19.44%, 7 of 36 pts Help a. What was Winston's total asset lumover ratio? operating retum on assets last year? Assuming the firm's operating profit margin remains the same, what will the operating nethum on assets be next year if the total asset turmover goal is a. What was Winston's total asset tunover ratio? Winston's total asset tumover rato was 2 x (Round to one decimal place, ) b. During the ooming year the company president has set a goal of attaining a total asset tumover of 3.5. How much must Sim sales rise, other things being the same, for the goal to be achieved? both dolars and percentage increase in sales ) The needed sales growth is milion (Rlound to one decimal place) 3
Explanation / Answer
Asset Turnover ratio = revenue/ total aseet
= 10.3 Million/5.4 Million
= 1.9
If Asset Turnover rise to 3.5 then total sales = 3.5 * total asset
= 3.5 * 5.4 Million
= 18.9 Million
Growth = $8.6 Million (18.9 - 10.3)
in percentage growth = 8.6/10.3 = 83.5%
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