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Net income divided by net sales is the:

a. return on total assets.

b. profit margin.

c. current ratio.

d. total asset turnover.

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Joshua Stredder
Joshua StredderLv10
3 Feb 2021
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Related questions

THIS ASSIGNMENT IS BASED ON FORM 10-K WALGREENS BOOTS ALLIANCE,INC. FOR 2017.

https://www.sec.gov/Archives/edgar/data/1618921/000161892117000069/wba-2017831x10k.htm#sD544AA1057C23391F01B25BC6265E816

Compute Ratios See specific details below.

Based on formulas given, compute the following ratios in Excelfor two years.

1. Current ratio: current assets/current liabilities

2. Debt ratio: total debt/total assets

3. Gross profit margin

4. Times interest earned: (Earnings before Interest &Taxes)/Interest Expense

5. Accounts receivable (AR) turnover: Net Credit Sales/AverageAR Note: Av

6. Inventory turnover: Sales/Average Inventory Note: Averageinventory = (

7. Return on Sales: Net Income (before interest &taxes)/Sales

8. Asset Turnover: Sales/average total assets

9. Return on Assets: net profit/average total assets

B. Prepare a DuPont Analysis of ROE for two years, includingcomputations of

Return on Sales

Asset Turnover

Return on Assets

Financial Leverage

Return on Equity

C. Briefly evaluate the ratio trends. Indicate on your worksheetwhether each ratio is:

stronger / weaker

quicker /slower

more / less liquid

more / less risk

Scully Corporation's comparative balance sheets are presentedbelow.
SCULLY CORPORATION
Balance Sheets

December 31

2010 2009
Cash $ 4,300 $ 3,700
Accounts receivable 21,200 23,400
Inventory 10,000 7,000
Land 20,000 26,000
Building 70,000 70,000
Accumulated depreciation
(15,000

)

(10,000

)

Total
$110,500


$120,100



Accounts payable $ 12,370 $ 31,100
Common stock 75,000 69,000
Retained earnings
23,130


20,000


Total
$110,500


$120,100



Scully's 2010 income statement included net sales of $100,000, costof goods sold of $60,000, and net income of $15,000.

Instructions

Compute the following ratios for 2010. (a) Current ratio. (b)Acid-test ratio. (c) Receivables turnover. (d) Inventory turnover.(e) Profit margin. (f) Asset turnover. (g) Return on assets. (h)Return on common stockholders' equity. (i) Debt to total assetsratio. (Round answers to 1 decimal place, e.g. 10.5.)

(a) Current ratio
(b) Acid-test ratio
(c) Receivables turnover
(d) Inventory turnover
(e) Profit margin %
(f) Asset turnover
(g) Return on assets %
(h) Return on common stockholders; equity %
(i) Debt to total assets ratio %

Using the info below on the DuPont System. Comment on each yearand what's significant about it.

The DuPont System
Operating Asset Financial
Efficiency Utilization Leverage
Profit margin X Total asset turnover = Return on investment X Financial leverage = Return on equity
Net income X Net sales = Net Income X Total assets = Net income
Net sales Total assets Total assets Stockholders' equity Stockholders' equity
Comments
2015 0.02091 3.39910 0.07108 3.14967 0.22389
2014 0.01867 3.33733 0.06232 2.68422 0.16728
2013 0.01982 3.39696 0.06733 2.79544 0.18822

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