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30 August, 14:24

The 2011 Annual Report of Tootsie Roll Industries contains the following information.

(in millions)

December 31, 2011

December 31, 2010

Total assets $857.9 $858.0

Total liabilities 191.9 190.6

Net sales 528.4 517.1

Net income 43.9 53.0

Compute the following ratios for Tootsie Roll for 2011.

(a) Asset turnover ratio (Round answer to 4 decimal places, e. g. 0.8512 times.)

The 2011 Annual Report of Tootsie Roll Industries times.

(b) Return on assets (Round answer to 2 decimal places, e. g. 4.87%.)

The 2011 Annual Report of Tootsie Roll Industries %

(c) Profit margin on sales (Round answer to 2 decimal places, e. g. 4.87%.)

The 2011 Annual Report of Tootsie Roll Industries

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Answers (1)
  1. 30 August, 15:55
    0
    Answer: (a) asset turnover in 2011

    = 62%.

    In 2010 = 61%

    (b) Return on assets in 2011

    = 6%

    In 2010 = 7%

    (c) Profit margin on sales in 2011

    = 9%

    In 2010 = 11%

    Explanation: (a) asset turnover in 2011 is calculated using the formula,

    Asset turnover = net sale/average total asset. Where net sales in 2011 is 528.4 and average total asset is 857.9, therefore

    528.4/857.9 = 62%

    Repeating thesame procedure for 2010=517.1/858.0 = 61%

    (b) Return on assets is calculated using this formula.

    Return=net income/average total asset. Where in 2011, net income is 43.9, and total asset is 857.9

    Therefore in 2011 return on asset

    = 43.9/857.9 = 6%

    Repeating thesame procedure for 2010 values we get

    53.0/858.0 = 7%

    (c) Profit margin on sales in 2011 is calculated by using net income/net sales, where net information 2011 is 43.9 and net sales is 528.4, therefore

    Profit margin = 43.9/528.4 = 9%

    Repeating same procedure for 2010 values we have that

    In 2010 profit margin on sales = 53.0/517.10 = 11%
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