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antiseptic1488 [7]
3 years ago
13

Roak Company and Clay Company are similar firms that operate in the same industry. Clay began operations 2 years ago and Roak st

arted 5 years ago. In the current year, both companies pay 9% interest on their debt to creditors. The following additional information is available.
Roak Company Clay Company
Current Yr 1 Yr ago 2 Yr ago Current Yr 1 Yr ago 2 Yr ago
Total asset turnover 4.8 4.5 4.7 3.2 3.8 2.8
Return on total assets 11% 13% 13.6% 7.9% 7.6% 7.3%
Profit margin ratio 4.1% 4.2% 4.0% 6.2% 6.4% 6.3%
Sales $495,000 $465,000 $481,000 $295,000 $255,000 $195,000

Required:
1. (a) Which company has the better profit margin? (b) Which has the better asset turnover? (c) Which has thebetter return on assets?
2. Which company has the better rate Of growth in sales?
3. (a) Did Roak successfully use financial leverage in the current year? (b) Did Clay?
Business
1 answer:
Paladinen [302]3 years ago
4 0

Answer:

<h3>Required:</h3>

1. (a) Which company has the better profit margin? (b) Which has the better asset turnover? (c) Which has thebetter return on assets?

2. Which company has the better rate Of growth in sales?

3. (a) Did Roak successfully use financial leverage in the current year? (b) Did Clay?

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Answer:

Prescriptive analytics      

Explanation:

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6 0
3 years ago
P. Jameson Co. sold $500 of merchandise on Master Card credit sales. The net cash receipts from the sale are immediately deposit
Alchen [17]

Answer:

The journal entry would be as follows:

Account                                  Debit           Credit

Cash                                       $480

Sales Revenue                                           $500

Credit Card Expense                                 $20

The Credit Card Expense corresponds to the 4% fee that Master Card charged P. Jameson Co. ($500 x 20% = $20)

4 0
3 years ago
The periodic expense created by allocating the cost of plant and equipment to the periods in which they are used, representing t
Alex787 [66]

Answer:

Option B Depreciation expense

Explanation:

The allocation of cost of the plant and equipment for the period being used is the concept of depreciation and is a period cost because when the asset is purchased its value decreases gradually with time which means some of the machinery value would be deminish during the year depending upon the technological factors, life of the equipment, etc. So the period cost will arise regardless of that we either use the asset or not which is the definition of period cost which in this case is depreciation cost and the allocation of cost of plant and equipment over its useful life is also depreciation cost.

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3 years ago
How does a local water budget differ from the water budget of the whole earth?
Brrunno [24]
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</span>
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3 years ago
Joshua borrowed $500 on January 1, 2017, and paid $25 in interest. The bank charged him a service charge of $15. He paid it all
Elena-2011 [213]

Answer: 8%

Explanation:

The Annual Percentage Rate or APR for short is calculated by dividing the finance cost by the total amount borrowed in the following manner,

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To calculate the Finance charge we add the interest and the service charge.

Finance charge = 25 + 15

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APR = 40/500

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3 0
3 years ago
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