#4, #6, #7 a

SPREADSHEET PROBLEMS 1. If a firm's net income (profits before taxes) is $120,000 and it has total assets of $1.5 million, what is its return on assets? 2. If a firm's total assets is $2.5 million and its return on assets is 12 percent, what is its net income? 3. If a firm is able to sustain the same level of operations in terms of sales and administrative expenses but reduces its materials cost by $50,000 through smarter purchases, what is the profit-leverage effect on gross profits? What is the profit- leverage effect on profits before taxes? 4. If a firm's cost of goods sold is $2.5 million and its average inventory is $500,000, what is the inventory turnover? 5. If a firm's cost of goods sold is $5 million and its inventory turnover is ten times, what is the average inventory? 6. If a firm's inventory turnover is eight times and its average inventory is $160,000, what is the cost of goods sold? 7. A retailer in Las Vegas has an ending inventory of $250,000 as of December 31, 2016, and the following accounting information. MONTH ENDING INVENTORY COST OF GOODS SOLD January $225,000 $1.200,000 February $325,000 $1,250,000 March $240,000 $1,350,000 April $325,000 $1,500,000 $450.000 $950,000 May June $220,000 $850,000 July $85.000 $1,650,000 August $156,000 $1,325,000 September $220,000 $1,750,000 October 5265,000 $850,000 November $100,000 $2,200,000 December $350.000 $3.500.000 a. Compute the monthly inventory turnover ratio for each of the twelve months. b. What are the annual cost of goods sold and the average inventory for the year? c Compute the annual inventory turnover ratio. How is the retailer's performance compare to the industry standard, assuming its business is similar to Walmarts