Torrid Romance Publishers has total receivables of $2,800, which represents 20 days’ sales. Total assets are $73,000. The firm’s operating profit margin is 5.9%. Find the firm's ROA and asset turnover ratio. (Use 365 days in a year. Do not round intermediate calculations. Round your final answers to 2 decimal places.)

Question

28-08-2020
Business

contestada

Torrid Romance Publishers has total receivables of $2,800, which represents 20 days’ sales. Total assets are $73,000. The firm’s operating profit margin is 5.9%. Find the firm's ROA and asset turnover ratio. (Use 365 days in a year. Do not round intermediate calculations. Round your final answers to 2 decimal places.)

Respuesta :

Otras preguntas

Some people have argued for the removal of cormorants from the eastern shores of Lake Ontario because of their negative effects on the fishing industry. Describ

When getting a vaccination, which substance is injected into the body? (1) bacteria to combat a pathogen (2) white blood cells to engulf a pathogen (3) a weaken

Jacob wants his aquarium area to have 18fish. Each tank has 3 fish. His father gave him 2 fish tank and his mother gave him 3 fish tanks as a gift. how many mor

Though no longer a series of colonies, the United States retains close ties to Britain as __________. a. a commonwealth b. a dependency c. a dominion d. part of

How many minutes will it take 5 people to stack 250 chairs if each person can stack 20 chairs a minute?

Alvin had some marbles in a box. He kept 1/3 of them and gave the remainder to Joyce and Sean. Joyce got 5/8 of the remainder. What fraction of the parables did

Fay travels 56 kilometers in 8 hours.How many kilometers will she travel in a day?

in the role of an observer in the united states government write a report on the economic situation in Europe after world war 2

A cartel differs from a monopoly in that A. one corporation has complete control of a product or service. B. businesses making the same product agree to limit

whats the relationship between enzymes and sunstrates?

abiolataiwo2015 abiolataiwo2015 · Answer 1 · 2020-09-01T03:15:06+02:00

Answer:

ROA=4.13

Asset turnover ratio = 0.70 times

Explanation:

1.Computation for ROA

Using this formula

ROA=Net income/Total assets

First step is to find Day's sales in receivables before calculating for the sales amount

Day's sales in receivables = Numbers of days in a year/Total receivables days sales

Let plug in the formula

Day's sales in receivables = 365 / 20

Day's sales in receivables = 18.25times

Now let find the Sales amount using this formula

Sales= Day's sales in receivables× Total receivables

Let plug in the formula

Sales = 18.25 times × $2,800

Sales=$51,100

Second step is to find the Net income

Using this formula

Net income =Percentage of Operating margin× Sales amount

Let plug in the formula

Net income=5.9%×$51,100

Net income =$3,014.90

Now let find the ROA using this formula

ROA=Net income/Total assets

Let plug in the formula

ROA=$3,014.90/$73,000

ROA=0.0413×100

ROA=4.13%

Therefore ROA will be 4.13%

2. Computation for asset turnover ratio

First step is to calculate for the Receivables turnover

Using this formula

Day's sales in receivables = Numbers of days in a year/Total receivables days sales

Let plug in the formula

Day's sales in receivables = 365 / 20

Day's sales in receivables = 18.25times

Second step is to find the Sales amount using this formula

Sales= Day's sales in receivables× Total receivables

Sales = 18.25 times × $2,800

Sales=$51,100

Now let calculate for the Asset turnover ratio using this formula

Asset turnover ratio = Sales / Total assets

Let plug in the formula

Asset turnover ratio= $51,100 / $73,000

Asset turnover ratio= 0.70 times

Therefore asset turnover ratio will be 0.70 times