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Calculate the profit margin; ROA; inventory turns; and transportation, warehousing, and inventory costs as a percentage of revenue for the following:

Sales = $210,000,000

Transportation cost = $12,000,000

Warehousing cost = $3,000,000

Inventory carrying cost = 30%

Cost of goods sold = $90,000,000

Other operating costs = $55,000,000

Average inventory = $10,000,000

Accounts receivable = $35,000,000

Cash = $15,000,000

Net fixed assets = $95,000,000

Interest = $10,000,000

Taxes = 40% of (EBIT-Interest)

Figure 13.14 Financial Impact of a 10 Percent Reduction in Transportation Cost TRANSPORTATION COST SYMBOL CLGN, 2020 $(000) REDUCED 10 PERCENT Sales S $150,000 $150,000 Cost of goods sold CGS 80,000 80,000 Gross margin GM = S - CGS $ 70,000 $ 70,000 Transportation TC $ 6,000 $ 5,400 Warehousing WC 1,500 1,500 Inventory carrying IC = IN X W 3,000 3,000 Other operating cost DOC 30,000 30,000 Total operating cost TOC $ 40,500 $ 39,900 Earnings before interest and taxes EBIT $ 29,500 $ 30,100 Interest INT $ 12,000 $ 12,000 Taxes TX 7,000 7,240 Net income NI $ 10,500 $ 10,860 Asset Deployment Inventory IN $ 10,000 $ 10,000 Accounts receivable AR 30,000 30,000 Cash CA 15,000 15,000 Fixed assets FA 90,000 90,000 Total assets TA $145,000 $145,000 Ratio Analysis Profit margin VI/S 7.00% 7.24% Return on assets NI/TA 7.24% 7.49% Inventory turns/year CGS/IN 8.00 8.00 Transportation as percentage of sales TC/S 4.00% 3.60% Warehousing as percentage of sales WC/S 1.00% 1.00% Inventory carrying as percentage of sales IC/S 2.00% 2.00% Source: Edward J. Bardi, Ph.D