Question

Figures are in millions of dollars

Net sales	$	2,473.8
Cost of goods sold (COGS)	$	1,316.2
Operating expenses (S&GA)	$	575.8
Inventory	$	250.1
Accounts receivable	$	36.7
Other current assets	$	68.9
Fixed assets	$	690.0

What's the net profit margin? $____ Show work.

What's the net profit margin %? _____ Show work.

What's the value of total assets? $____ Show work.

What's the asset turnover ? $____ Show work.

What's the return on assets (ROA)? $____ Show work.

Answer 1

Calculate net profit margin
Net profit margin ($)	Net sales - Cost of goods sold - Operating expenses
Net profit margin ($)	2473.8-1316.2-575.8
Net profit margin ($)	$581.8	million
Calculate net profit margin (%)
Net profit margin (%)	Net profit margin/Sales revenue
Net profit margin (%)	581.8/2473.8
Net profit margin (%)	23.52%
Calculate value of total assets
Total assets	Inventory + Accounts receivable + Other current assets + Fixed assets
Total assets	250.1+36.7+68.9+690
Total assets	$1,045.7	million
Calculate asset turnover
Asset turnover	Net sales/Total assets
Asset turnover	2473.8/1045.7
Asset turnover	2.37
Calculate return on assets
Return on assets	Net profit margin/Total assets
Return on assets	581.8/1045.7
Return on assets	55.64%