All categories

3 years ago

Simon Company's year-end balance sheets follow.

Business

1 answer:

Fofino [41]3 years ago

6 0

Answer:

1. 2014 = 11 % and 2013 = 15 %

2. 2014 = 1.30 times and 2013 = 1.41 times

3. 2014 = 14.27 % and 2013 = 21.16 %

Explanation:

1. Profit margin ratio

Profit margin ratio = Earnings Before Interest and Tax / Sales × 100

Therefore,

Profit margin ratio (2014) = ($ 52.400 + $ 9,550 + $12,300) / $675,000 × 100

= 11 %

Profit margin ratio (2013) = $ 72,575 + $ 8,925 + $13,000) / $630,000 × 100

= 15 %

2. Total Asset turnover.

Total Asset turnover = Sales ÷ Total Assets

Therefore,

Total Asset turnover (2014) = $675,000 ÷ $ 520,500

= 1.30 times

Total Asset turnover (2013) = $630,000 ÷ $446,550

= 1.41 times

3. Return on total asset

Return on total asset = Earnings Before Interest and Tax (EBIT) / Total Assets × 100

Therefore,

Return on total asset (2014) = $ 52.400 + $12,300 + $9,550 / $ 520,500 × 100

= 14.27 %

Return on total asset (2013) = $ 72,575 + $8,925 + $13,000 / $446,550 × 100

= 21.16 %

You might be interested in

Molly Jasper and her sister, Caitlin Peters, got into the novelties business almost by accident. Molly, a talented sculptor, oft

Paladinen [302]

a. The computation of Mollycaits' operating break-even point is 2,473 units ($4,500/$1.82).

b. The calculation of Mollycaits' EBIT on the department store order is $812.40 ($9,500 - $8,688).

c. If department stores' price were $9.51, the EBIT will be $5,387 ($14,075 - $8,688).

Note that for (b) and (c), the fixed cost is not considered.

d. Without paying more than $7.69, the quantity that will result in an EBIT of $3,700 is 4,505 units ($4,500 + $3,700)/$1.82

e. Varieties of Mollycaits = 15 with variable cost of $5.87

f. The recommendation to Molly and Caitlin with regard to pricing and varieties to offer is that, while the company can varieties to suit the needs of customers, it must ensure that it does not price them below $5.87, its operating cost.

Data and Calculations:

Special contract:

Units of figurines offered = 1,480

Sales value of offer = $9,500

Selling price per unit = $6.42 ($9,500/1,480)

Variable operating cost = $5.87

Contribution margin per unit = $0.55 ($6.42 - $5.97)

Normal business:

Estimated average price per unit = $7.69

Variable operating cost = $5.87

Contribution margin per unit based on average price = $1.82 ($7.69 - $5.87)

Fixed cost per month = $4,500

Thus, Molly and Caitlin can offer various types of figurine, but they must sell at least 2,473 units to break-even.

Learn more about computing break-even points here: brainly.com/question/9212451

5 0

3 years ago

The balance of Chiaki's average balance checking account at the beginning of the last cycle was $100, and the only transaction f

Ne4ueva [31]

The correct answer is $90

3 0

3 years ago

Read 2 more answers

Suppose there are 6 firms in an industry with the following market shares. if the two smallest firms want to merge, how will the

Semenov [28]

The firms will not be allowed to merge if the two smallest firms want to merge. Thus, option D is correct.

<h3>What is a merger?</h3>

Anytime two businesses combine to create a new business, it is called a merger. Businesses merge in order to enhance their sales volume, diversified their product portfolio, decreased risk and rivalry, and maximize profits.

If the firm wants the people to merge the two companies then that means that there will be some issues that being there in the merger as they will imply that the corporate will have to take permission. Therefore, option D is the correct option.

Learn more about mergers, here:

brainly.com/question/1086715

#SPJ4

The question is incomplete, the complete question will be:

Firm 1: 30 Firm 2: 25 Firm 3: 25 Firm 4: 10 Firm 5:7 Firm 6:3

The firms will be challenged because the merger will raise the HHI by more than 50 points.

The firms will be allowed to merge and compete with the larger firms.

The firms will be challenged because the merger will raise the HHI by more than 100 points.

The firms will not be allowed to merge

The firms will be challenged because the merger will raise the HHI by more than 250 points.

3 0

2 years ago

The most likely effect of a write-down of inventory to net realizable on a firm's total asset turnover is:

Y_Kistochka [10]

The most likely effect of a write-down of inventory to net realizable on a firm's total asset turnover is an increase.

A write-down of inventory to net realizable value is typically recognized as an increase in cost of goods sold in the period of the write-down, according the inventory equation:
ending inventory = beginning inventory + purchases - cost of goods sold

7 0

3 years ago

What's the present value of a 4-year ordinary annuity of $2,250 per year plus an additional $3,000 at the end of Year 4 if the i

jarptica [38.1K]

Answer:

The correct answer is B.

Explanation:

Giving the following information:

Cash flow= $2,250

n= 4

i= 5%

Additional investment= $3,000

First, we need to calculate the future value using the following formula:

FV= {A*[(1+i)^n-1]}/i

A= annual deposit

FV= {2,250*[(1.05^4) - 1]} / 0.05

FV= 9,697.78 + 3,000

FV= $12,697.78

Now, the present value:

PV= FV/(1+i)^n

PV= 12,697.78/(1.05^4)

PV= $10,446.5

3 0

3 years ago