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wlad13 [49]
3 years ago
7

Zoogle has the following selected data ($ in millions): (Round your answers to 2 decimal place. Enter your answers in millions (

i.e., $10,110,000 should be entered as 10.11).)
Net sales $ 24,451
Net income 6,600
Operating cash flows 9,324
Total assets, beginning 39,768
Total assets, ending 48,497

Required:

1. Calculate the return on assets.
2. Calculate the cash return on assets.
3. Calculate the cash flow to sales ratio and the asset turnover ratio.
Business
1 answer:
Llana [10]3 years ago
3 0

Answer:

1.

13.6%

2.

19.23%

3.

38.13%

&

0.55

Explanation:

1.

Return on Asset is the ratio of net income to total asset of the company. It measure the productivity and efficiency of all the assets used to generate this net income.

Return on Assets = Net Income / Total Assets = $6,600 / $48,497 = 0.136 = 13.6%

2.

Cash Return on Asset is the ratio of Operating cash flows to total asset of the company. It measure the productivity and efficiency of all the assets used to generate this operating cash flow.

Return on Assets = Operating cash flow / Total Assets = $9,324 / $48,497 = 0.1923 = 19.23%

3.

Cash flow to sales is the ratio of cash flow in the period to sales. It measures that how much cash received as percentage of sales.

Cash Flow to Sales = Operating Cash flow / Sales = $9,324 / $24,451 = 0.3813 = 38.13%

Assets turnover is a ratio of sales to the fixed asset of a company. It shows that how effectively the company using its fixed assets to generate the revenue. It measures the efficiency of the fixed asset in making sales.

Formula

Asset Turnover = Net Sales / *Avg. Fixed Assets = $24,451 / $44,132.5 = 0.55

*Average Fixed Assets = ($39,768 + $48,497) / 2 = $44,132.5

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