| a. |
Total liabilities are $1,075,880, while total assets are $1,287,000. Calculate the debt-to-assets ratio.(Round your answer to 2 decimal places.)
|
| Debt-to-assets ratio |
| b. |
The
asset turnover ratio is 1.37, while sales revenue is $47,950. Assets at
the beginning of the accounting period were $34,000. Calculate assets
at the end of the accounting period. (Omit the "$" sign in your response.)
|
| Assets at the end | $ |
| c. |
The net profit margin ratio is 11.93% and sales revenue is $360,000. Calculate the net income. (Omit the "$" sign in your response.)
|
| Net income | $ |
| d. |
The debt-to-assets ratio is 52% and assets are $223,000. Calculate total liabilities. (Omit the "$" sign in your response.)
|
| Total liabilities | $ |
| e. |
The net profit margin ratio is 0.138 and net income is $175,260. Calculate sales revenue. (Omit the "$" sign in your response.)
|
| Sales revenue | $ |
| f. |
Refer
to the information in part E. Sales revenue increase by $270,000 and
expenses increase by $180,000. Calculate the new net profit margin
ratio. (Round your answer to 2 decimal places. Omit the "%" sign in your response.)
|
| New profit margin ratio | % |
| g. |
The
asset turnover rate is .75 and the company invests $415,000 in new
equipment and facilities. Assume that the turnover rate remains the
same. Determine the increase in sales revenue.(Omit the "$" sign in your response.)
|
| Increase in sales revenue | $ |
Explanation: a.
| $1,075,880 ÷ $1,287,000 = 0.84 |
b.
| 1.37 = $47,950 ÷ Average Total Assets |
| 1.37 × Average Total Assets = $47,950 |
| Average Total Assets = $47,950 ÷ 1.37 |
| Average Total Assets = $35,000 |
| Average Total Assets = (Assets at the beginning + assets at the end) ÷ 2 |
| $35,000 × 2 = Assets at the beginning + assets at the end |
| $70,000 = $34,000 + assets at the end |
| $36,000 = assets at the end |
c.
| 0.1193 = Net Income ÷ $360,000 |
| 0.1193 × $360,000 = Net Income |
| $42,948 = Net Income |
d.
| 0.52 = Total Liabilities ÷ $223,000. |
| 0.52 × $223,000 = Total Liabilities |
| $115,960 = Total Liabilities |
e.
| 0.138 = $175,260 ÷ Sales Revenue |
| 0.138 × Sales Revenue = $175,260 |
| Sales Revenue = $175,260 ÷ 0.138 |
| Sales Revenue = $1,270,000 |
f.
| New Sales Revenue = $1,270,000 + $270,000 = $1,540,000 |
| Increase in Net Income = Increase in Revenues – Increase in Expenses |
| $270,000 – $180,000 = $90,000 |
| New Net Income = $175,260 + $90,000 = $265,260 |
| New Profit Margin Ratio = $265,260 ÷ $1,540,000 |
| New Profit Margin Ratio = 0.1722 or 17.22% |
g.
| Since the asset turnover rate is unchanged, it must be .75 for the new assets as well as the old. |
| 0.75 = Change in Sales Revenue ÷ Change in Total Assets |
| 0.75 = Change in Sales Revenue ÷ $415,000 |
| 0.75 × $415,000 = Change in Sales Revenue |
| $311,250 = Change in Sales Revenue |
No comments:
Post a Comment