1. If the sales = $42,000 and cost of goods sold is 65% of sales , calculate...
Question:
1. If the sales = $42,000 and cost of goods sold is 65% of sales , calculate the gross profit (2 marks)
2. Given Sales is $120,000 and Profit Margin ratio is 23% calculate the Net Profit (2 marks)
3. Below are the ratios of Ali footwear firms for three years.
2016
2015
2014
Profit margin
28%
25%
22%
Return on Equity
45%
33%
30%
Calculate the average Profit margin and Return on Equity for three years.
If the Industry average for Profit margin is 28% and Return on Equity is 35%, compare the above ratios are favorable/unfavorable for Ali Footwear and why.
What does Profit margin ratio means to you?
Recommend two ways to company to increase profit? ( 6 marks)
4. Given total sales of $200,000, total assets of $180,000, shareholders equity $150,000 and net income of $50,000, calculate :
a) Profit margin.
b) Return on Assets
c) Return on Equity
Expert Answer:
1 If the sales 42000 and cost of goods sold is 65 of sales calculate the gross profit 2 marks Gross ... View the full answer
