Squidward Tentacles, the financial analyst reporting to the chief financial officer of Alufab Aluminum Company, is comparing the performance of the company’s four separate divisions based on profit margin and return on assets. The relevant figures follow (figures in $000)

	Mining	smelting	rolling	extrusion
Net Income	$ 500	$ 2,600	$ 7,000	$ 2,500
Sales	15,000	30,000	60,000	25,000
Total Assets	12,000	25,000	39,000	18,000

a. Compare profit margin ratios of the four divisions.

b. Compare return on assets ratios of the four divisions.

c. Compute profit margin of the entire company.

d. Compute return on assets of the entire company.

Answer rating: 100% (QA)

To calculate the profit margin and return on assets for each division and for the entire company we ... View the full answer