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galina1969 [7]
3 years ago
10

Decision makers and analysts look deeply into profitability ratios to identify trends in a company’s profitability. Profitabilit

y ratios give insights into both the survivability of a company and the benefits that shareholders receive. Identify which of the following statements are true about profitability ratios. Check all that apply.O If a company has a profit margin of 10%, it means that the company earned a net income of $0.10 for each dollar of sales.
O An increase in the return on assets ratio implies an increase in the assets a firm owns.
O If a company's operating margin increases but its profit margin decreases, it could mean that the company paid more in interest or taxes.
O If a company issues new common shares but its net income does not increase, return on common equity will increase.
Business
1 answer:
ahrayia [7]3 years ago
4 0

Answer:

  • If a company has a profit margin of 10%, it means that the company earned a net income of $0.10 for each dollar of sales.  A 10% PROFIT MARGIN MEANS THAT THE COMPANY EARNED 10 CENTS FOR EVERY DOLLAR OF REVENUE.
  • If a company's operating margin increases but its profit margin decreases, it could mean that the company paid more in interest or taxes.  OPERATING PROFIT = GROSS PROFIT - FIXED COSTS, NET PROFIT = OPERATING PROFIT - (INTERESTS AND TAXES). IF TAXES OR INTERESTS INCREASE, NET PROFITS DECREASE

Explanation:

there are several profitability ratios, the most important ones are:

  1. profit margin = net profit / total revenue
  2. gross profit margin = gross profit / total revenue
  3. return on equity = net income / total shareholder equity
  4. return on assets = net income / total assets

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Joseph is an unemployed yard landscaping worker who is trying to find employment as he last had work seven months ago. He is now
Mandarinka [93]

Answer:

Cyclical Unemployment

Explanation:

Cyclical Unemployment occurs due to irregularities surrounding an economy and these said cycles eventually brings about recession and thus, a good number of willing workers would not be able to get jobs due to this fact. What Joseph is experiencing is called Cyclical unemployment.

3 0
3 years ago
On September 12, Vander Company sold merchandise in the amount of $2,200 to Jepson Company, with credit terms of 2/10, n/30. The
Vlad1618 [11]

Answer and Explanation:

The Journal entry is shown below:-

Cash Dr, 1969.80 (2010 × 98%)

Sales discount Dr, 40.20

            To Account receivable $2,010 ($2,200 - $190)

(Being the entry is recorded)

Here we debited the cash and sales discount as it increased the assets and we credited the accounts receivable as it reduced the assets

3 0
3 years ago
What are the possible consequences of making a late payment?
olya-2409 [2.1K]

Answer:

not being able to do buissnes with that company anymore

Explanation:

7 0
3 years ago
Return on Common Stockholders' Equity
attashe74 [19]

Answer:

Explanation:

Return on common stockholders' equity for 2015:

(Net income - preferred stock)/Equity

(63,000-5,400)/2,400,000 = 57,600/2,400,000 = 2.4%

Return on common stockholders' equity for 2015:

(99,000-5,400)/3,000,000 = 93,600/3,000,000 = 3.12%

From these calculations, it is clear that return has improved.

8 0
3 years ago
Imperial Jewelers manufactures and sells a gold bracelet for $403.00. The company’s accounting system says that the unit product
AysviL [449]

Answer:

a) Financial advantage   <u> $2,208 </u>

b) The company should accept the special order, as it will increase its profit by $2,208

Explanation:

<em>The relevant costs for decision to accept the special order are  </em>

<em>I Incremental Revenue from the special order  </em>

<em>2. incremental variable cost </em>

<em>3. The cost of the special tool</em>

Unit variable cost = 143 + 90 + 8 + 7 = $240

<em>Note that that the increase in material cost of $8 and the variable manufacturing overhead of $7 are relevant to the special order decision. Hence they are added.</em>

<em>And the balance of manufacturing overhead would be incurred either way. Therefore , they are not relevant for the decision</em>

                                                                                                       $

Sales revenue from special order

(22× $361.00)                                                                               7942

Variable cost of special order

(22× $240 )                                                                                    (5280 )

Cost of special tool                                                                      <u> (454)</u>

Financial advantage                                                                    <u> 2,208 </u>

The company should accept the special order, as it will increase its profit by $2,208

3 0
2 years ago
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