Question

Division A reports the following data: Sales = $180,000, Net income = $18,000, Average'assets

Answer 1

Company A is operating more efficiently

Step-by-step explanation:

Given parameters:

Division A:

Sales = $180,000

Net income = $18,000

Average assets = $72,000

Division B:

Sales = $60,000

Net income = $9,600

Average assets = $48,000

Unknown:

Division operating more efficiently = ?

Solution:

Efficiency measures the relationship between the output from a business and the input into it. Here, the efficiency is the relationship between the net income and the average assets. it can be expressed as a percentage or ratio.

The net income is the profit derived from sales of a company's products.

The higher the value the more efficient a company is.

 Efficiency = $\frac{net income}{Average assets}$ x 100

 Efficiency of division A = $\frac{18000}{72000}$ x 100 = 25%

 Efficiency of division B = $\frac{9600}{48000}$ x 100 = 20%

Division A has a higher efficiency compared to B

Learn more:

Economic goals brainly.com/question/8951463

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