Ask Question
24 May, 23:46

Dimeback co. Has total assets of $8,500,000 and a total asset turnover of 1.8 times. If the return on assets is 8.5 percent. Required: what is its profit margin?

+2
Answers (1)
  1. 25 May, 01:28
    0
    Total asset turnover ratio = Net Sales / Total assets

    Total asset turnover ratio = 1.8

    Total assets = 8,500,000

    1.8 = Net Sales / 8,500,000

    Net Sales = 8,500,000*1.8 = 15,300,000

    Return on Assets = Net Income / Total assets

    Return on assets = 8.5% = 0.085

    Total assets = 8,500,000

    0.085 = Net Income/8,500,000

    Net Income = 8,500,000*0.085 = 722,500

    Profit margin = Net income/Net sales

    Profit margin = 722,500/15,300,000 = 0.0472

    Profit margin = 4.72%
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Dimeback co. Has total assets of $8,500,000 and a total asset turnover of 1.8 times. If the return on assets is 8.5 percent. Required: what ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers