Mohave Corp. is considering outsourcing production of the umbrella tote bag included with some of its products. The company has
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Answer:
a) Firm’s return on assets = 11.46 %
b) Return on stockholders’ equity = 19.37%
c) Profit margin = 3.27%
Explanation:
a) Return on assets =
=
b) Return on stockholder's equity =
Equity =Total assets - Debt = $1,710,000 - $698,000 = $1,012,000
Return on equity =
c) Asset Turnover ratio = = 3.5
then Net sales = 3.5 X Total Assets = = 3.5 X $1,710,000 = $5,985,000
Profit margin =
a) Firm’s return on assets = 11.46 %
b) Return on stockholders’ equity = 19.37%
c) Profit margin = 3.27%