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sweet [91]
3 years ago
5

Using the following information, prepare a vertical analysis of two years' income statements. Fees Earned is $153,500 for Year 2

and $149,700 for Year 1. Operating expenses are $122,800 for Year 2 and $127,245 for Year 1. Which of the following statements are true?
A. Operating income has decreased as a percentage of revenue.
B. Operating income has increased as a percentage of revenue.
C. None of these choices are correct.
D. Operating expenses have increased as a percentage of revenue.
Business
1 answer:
ValentinkaMS [17]3 years ago
7 0

Answer:

(B) Operating income has increased as a percentage of revenue

Explanation:

Conducting a vertical analysis,

Operating income (year 1) = Fees earned, less operating expenses

= 149,700 - 127,245 = $22,455

Therefore operating income as a percentage of revenue = 22,455/149,700 = 15%.

Operating income (year 2) = 153,500 - 122,800 = $30,700

Therefore operating income as a percentage of revenue = 30,700/153,500 = 20%.

Therefore, operating income as a percentage of revenue increased from year 1 to year 2.

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7 0
2 years ago
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If a county government decided to build parks, then the money and resources would not be available for additional fire fighters.
Keith_Richards [23]

Answer:

a. Misallocation of resources

Explanation:

Misallocation of resources implies that assets are not put to their best, best, or proficient use. The utilization of the term misallocation in financial matters is that market analysts recognize two kinds of efficiencies: productive and allocative. The productive alludes to the (effective) utilization of assets to deliver given merchandise and ventures. The allocative alludes to which merchandise and enterprises ought to be created, and who ought to get the opportunity to devour them. Financial matters are generally worried about allocative thought of productivity.

3 0
2 years ago
Bello, Inc., has a total debt ratio of .31.
lutik1710 [3]

Answer:

a. Debt Equity ratio is calculated by dividing long term Debt by total equity of the company.

b.Equity Multiplier or P/E ratio=Market value per share/Earning per share.

Explanation:

a. Debt Equity ratio is calculated by dividing long term Debt by total equity of the company. The Debt Equity ratio can be calculated using the Market value of debt or equity. It can also be calculated using the book values of debt or equity which are included in the balance sheet of the company.

b. Equity multiplier is also known as price /earning ratio. A price/earnings ratio or P/E ratio is the ratio of the market value of a share to the  annual earnings per share. For every company whose shares are traded on a  stock market, there is a P/E ratio. For private companies (companies whose shares are not traded on a stock market) a suitable P/E ratio can be selected and  used to derive a valuation for the shares.

Equity Multiplier or P/E ratio=Market value per share/Earning per share.

4 0
2 years ago
The gross earnings of the factory workers for Larkin Company during the month of January are $91,000. The employer's payroll tax
cestrela7 [59]

Answer:

Explanation:

The journal entry is shown below:

(a) Factory Labor/Expenses A/c Dr $103,800

        To Factory wages payable               $91,000

         To Employer payroll taxes payable $7,700

         To Fringe benefits payable              $5,100

(Being labor expenses are recorded)

(b) Direct labor A/c Dr   $87192 ($103,800 × 84%)

    Indirect labor A/c Dr $16,608 ($103,800 × 16%)

          To Factory Labor                     $103,800

(Being factor labor is assigned)

7 0
3 years ago
Mary's a marketing manager for a nationwide restaurant chain. She's considering which channel she should use to advertise her re
Vilka [71]

Answer:

Television

Explanation:

By doing the promotion in a television could be beneficial for the company as most of the audience are habitual to see the television and ofcourse many of them could aware of the company product by seeing the attractive schemes that ultimately benefit to the company and the customers

So in order to upgrade the menu, Mary used traditional channels and to reach to a broad audience, the television is one of the most traditional channel used

8 0
2 years ago
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