Question

In: Finance

Dimeback Co. has total assets of $8,800,000 and a total assetturnover of 2.38 times. Assume...

Dimeback Co. has total assets of $8,800,000 and a total asset turnover of 2.38 times. Assume the return on assets is 12 percent.

What is the company's sales? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) Sales

What is the company's net income? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) Net income

What is its profit margin? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Profit margin

Expert Solution

Total assets = $8,800,000

Total asset turnover = 2.38 times

Return on assets = 12%

Company's Sales = Total assets * Total asset turnover ratio

Company's Sales = 8,800,000 * 2.38 = $20,944,000

Company's net income = Total assets * Return on assets

Company's net income = 8,800,000 * 0.12

Company's net income = $1,056,000

Profit margin = Net income/Sales

Profit margin = 1,056,000/20,944,000

Profit margin = 0.05042016807

Profit margin = 5.04201607%

Profit margin = 5.04%

jeff jeffy answered 2 years ago

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