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Hunter-Best [27]
3 years ago
15

The income statement for Stretch-Tape Corporation reports net sales of $540,000 and net income of $65,700. Average total assets

for the year are $900,000. Stockholders' equity at the beginning of the year was $600,000, and $30,000 was paid to stockholders as dividends during the year. There were no other stockholders' equity transactions that occurred during the year.Required:Calculate the return on assets, profit margin, asset turnover, and return on equity ratios.
Business
1 answer:
Mnenie [13.5K]3 years ago
8 0

Answer:

7.3%; 12.17%; 0.6 times; 15.95%

Explanation:

Return on assets:

= Net Income ÷ Average total assets

= ($65,700 ÷ $900,000) × 100

= 7.3%

Profit Margin:

= Net Income ÷ Net Sales

= ($65,700 ÷ $540,000) × 100

= 12.17%

Asset Turnover:

= Net Sales ÷ Average Total Assets

= $540,000 ÷ $900,000

= 0.6 times

Return on Equity:

= Net Income before dividend ÷ Equity

= [($65,700 + $30,000) ÷ $600,000] × 100  

= ($95,700 ÷ $600,000] × 100  

= 15.95%

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Alexxandr [17]

Answer: Option A

                                         

Explanation: In simple words, human capital refers to the economic value of an individual employee to the organisation in which he or she works as based on the skill sets and experience that he she possess.

    The economic value can be created using various tools like education, training, good health or loyalty etc. Human capital is considered as an intangible asset but is not recorded in the balance sheet of the company as it cannot be quantified.

However, it is considered as the most important asset because the effective use of other resources depends on the human capital of an organisation.

7 0
3 years ago
Use the following information for Problems 35 through 40 A potential investor is seeking to invest $1,000,000 in a venture, whic
vodka [1.7K]

Answer:

0.3797 or 37.97%

Explanation:

According to the scenario, computation of the given data are as follow:-

Wants Rate on return on investment = 50%

Expected value of return on investment = invested amount × (1+g)^t

= $1,000,000 × (1+50%)^5

= $1,000,000 × 7.59375

= $7,593,750

Similar venture would achieve valuation of $20,000,000 for $2,000,000. We can expect that company would achieve similar valuation of $20,000,000 in 5 years from now.

Investor’s share value at 5 years = $7,593,750 ÷ $20,000,000

= 0.3797 or 37.97%

4 0
3 years ago
Hook Industries's capital structure consists solely of debt and common equity. It can issue debt at rd = 11%, and its common sto
ANTONII [103]

Answer:

16.30%

Explanation:

Calculation for what the percentage of the company's capital structure consists of debt

Using this formula

rs=D1/P0+g

First step is to find the D1 using this formula

D1=(1+Dividend expected grow constant rate) *+Dividend per share

Let plug in the formula

D1=(1+0.07)*$2.00

D1=1.07*$2.00

D1=$2.14

Now let find the percentage of the company's capital structure Using this formula

rs=D1/P0+g

Let plug in the formula

rs=$2.14/$23.00+0.07

rs=0.09304947+0.07

rs=0.1630*100

rs=16.30%

Therefore the percentage of the company's capital structure consists of debt will be 16.30%

5 0
3 years ago
Explain id there is excess supply or demand of goods at the equilibrium price and why? In sentences
enot [183]

Answer by YourHope:


Hi! :)


Question: Explain if there is excess supply or demand of goods at the equilibrium price and why?


Answer: Equilibrium is at the point where supply and demand meet and the prices are set. Since the price is set as a equilibrium, there won't be an excess to either, but if you set the price above equilibrium, you move away from equilibrium and have disequilibrium create excess supply or excess demand!


Have a BEAUTIFUL day~

8 0
3 years ago
Suppose the real risk-free rate is 3.00%, the average expected future inflation rate is 5.90%, and a maturity risk premium of 0.
Kamila [148]

Answer:

The answer is 9.00%

Explanation:

real risk-free rate = 3.00%

average expected future inflation rate = 5.90%

Maturity risk premium = 0.10%

The expected rate of return on a 1 year treasury security would be = the average expected future inflation rate + maturity risk premium + real risk-free rate.

= 3.00% + 5.90% + 0.10%

= 9.00%

6 0
3 years ago
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