Foundations of Financial Management
16th Edition
ISBN: 9781259277160
Author: Stanley B. Block, Geoffrey A. Hirt, Bartley Danielsen
Publisher: McGraw-Hill Education
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Chapter 3, Problem 11P
Baker Oats had an asset turnover of 1.6 times per year.
a. If the
b. The following year, on the same level of assets, Baker’s assets turnover declined to 1.4 times and its profit margin was 8 percent. How did the return on total assets change from that of the previous year?
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1. Compute the company's average operating assets for last year.
2. Compute the company’s margin, turnover, and return on investment (ROI) for last year. (Round "Margin", "Turnover" and "ROI" to 2 decimal places.)
3. What was the company’s residual income last year?
Baker Oats had an asset turnover of 1.8 times per year.
a. If the return on total assets (investment) was 12 percent, what was Baker's profit margin? (Input your answer as a percent
rounded to 1 decimal place.)
Profit margin
Baker Oats had an asset turnover of 1.8 times per year. If the return on total assets (investment) was 13 percent, what was Baker’s profit margin?
Chapter 3 Solutions
Foundations of Financial Management
Ch. 3 - If we divide users of ratios into short-term...Ch. 3 - Explain how the Du Pont system of analysis breaks...Ch. 3 - If the accounts receivable turnover ratio is...Ch. 3 - Prob. 4DQCh. 3 - Is there any validity in rule-of-thumb ratios for...Ch. 3 - Why is trend analysis helpful in analyzing ratios?...Ch. 3 - Inflation can have significant effects on income...Ch. 3 - What effect will disinflation following a highly...Ch. 3 - Why might disinflation prove favorable to...Ch. 3 - Comparisons of income can be very difficult for...
Ch. 3 - Low Carb Diet Supplement Inc. has two divisions....Ch. 3 - Database Systems is considering expansion into a...Ch. 3 - Prob. 3PCh. 3 - Prob. 4PCh. 3 - Prob. 5PCh. 3 - Dr. Zhivà€go Diagnostics Corp.’s income...Ch. 3 - The Haines Corp. shows the following financial...Ch. 3 - Easter Egg and Poultry Company has $2,000,000 in...Ch. 3 - Prob. 9PCh. 3 - Prob. 10PCh. 3 - Baker Oats had an asset turnover of 1.6 times per...Ch. 3 - AllState Trucking Co. has the following ratios...Ch. 3 - Front Beam Lighting Company has the following...Ch. 3 - Prob. 14PCh. 3 - Prob. 15PCh. 3 - Jerry Rice and Grain Stores has $4,780,000 in...Ch. 3 - Prob. 17PCh. 3 - Prob. 18PCh. 3 - Prob. 19PCh. 3 - Prob. 20PCh. 3 - Jim Short’s Company makes clothing for schools....Ch. 3 - The balance sheet for Stud Clothiers is shown...Ch. 3 - The Lancaster Corporation’s income statement is...Ch. 3 - Prob. 24PCh. 3 - Prob. 25PCh. 3 - Prob. 26PCh. 3 - Prob. 27PCh. 3 - Prob. 28PCh. 3 - The Global Products Corporation has three...Ch. 3 - Prob. 30PCh. 3 - Prob. 31PCh. 3 - Prob. 32PCh. 3 - Prob. 33PCh. 3 - Prob. 34PCh. 3 - The following information is from Harrelson...Ch. 3 - Using the financial statements for the Snider...Ch. 3 - Given the financial statements for Jones...
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- Problem 18 (Profitability Ratios) a. Alpha Industries had an asset turnover of 1.4 times per year. If the retum on total assets (investment) was 8.4 percent, what was Alpha's profit margin? b. The following year, on the same level of assets, Alpha's asset turnover declined to 1.2 times and its profit margin was 7 percent. How did the retum on total assets change from that of the previous year?arrow_forwardLast year's asset turnover of All is Well Company was 3.0. This year, the company's sales increased by 20% and average total asset decreased by 10%. What is this year's asset turnover? (Express in decimal)arrow_forwardPROBLEM 11-17 Return on Investment (ROI) and Residual Income LO11-1, LO11-2 Financial data for Joel de Paris, Inc., for last year follow: Joel de Paris, Inc. Balance Sheet Beginning Ending Balance Balance Assets Cash $ 140,000 $ 120,000 Accounts receivable 450,000 530,000 Inventory 320,000 380,000 Plant and equipment, net 680,000 620,000 Investment in Buisson, S.A. 280,000 170,000 250,000 Land (undeveloped) 180,000 Total assets $2,020,000 $2,100,000 Liabilities and Stockholders' Equity Accounts payable. $ 360,000 $ 310,000 Long-term debt Stockholders' equity 1,500,000 1,500,000 160,000 290,000 Total liabilities and stockholders' equity $2,020,000 $2,100,000 Joel de Paris, Inc. Income Statement Sales $4,050,000 Operating expenses Net operating income 3,645,000 405,000 Interest and taxes: Interest expense $150,000 Таx expense 110,000 260,000 Net income $ 145,000 The company paid dividends of $15,000 last year. The "Investment in Buisson, S.A.," on the balance sheet represents an…arrow_forward
- The Carlo Company’s Household Products Division reported in 2007 sales of P15,000,000, an asset turnover ratio of 3.0, and a rate of return on average assets of 18 percent. Question: What is the percentage of net income to sales?arrow_forwardFor a recent year L’Oréal reported operating profit of €3,385 (in millions) for its cosmetics division. Total assets were €12,888 (in millions) at the beginning of the year and €13,099 (in millions) at the end of the year. Compute return on investment for the year. State your answer as a percent, rounded to two decimals.arrow_forwardLast year, Beecher Manufacturing had a 12.5% ROA, net income of $800,000, and net sales of $1,600,000. Given these values, what was the firm's asset turnover ratio? a.) 0.45 b.) 0.25 c.) 0.50 d.) 0.20arrow_forward
- Ryngard Corp's sales last year were $42,000, and its total assets were $15,000. What was its total assets turnover ratio? Question 8 options: 2.8 2.36 2.31 2.63arrow_forward(Profitability analysis) Last year Triangular Resources earned $4.6 million in net operating income and had an operating profit margin of 19.7 percent. If the firm's total asset turnover ratio was 1.56, what was the firm's investment in total assets? The company's total assets are $ million. (Round to one decimal place.)arrow_forwardLast year, Triangular Resources earned $4.6 million in net operating income and had an operating profit margin of 20.5 percent. If the firm’s total asset turnover ratio was 1.53, what was the firm’s investment in total assets?arrow_forward
- ast year Triangular Resources earned $5.4 million in net operating income and had an operating profit margin of 19.3 percent. If the firm's total asset turnover ratio was 1.59, what was the firm's investment in total assets?arrow_forwardRequired: 1. Compute the company's average operating assets for last year. 2. Compute the company's margin, turnover, and return on investment (ROI) for last year. Note: Round "Margin", "Turnover" and "ROI" to 2 decimal places. 3. What was the company's residual income last year? 1. Average operating assets 2. Margin 2. Turnover 2. ROI 3. Residual income % %arrow_forwardBalance Sheet Beginning Balance Ending Balance Assets $ 131,000 334,000 579,000 786,000 401,000 255,000 $ 2,486,000 $ 126,000 480,000 483,000 781,000 435,000 251,000 $ 2,556,000 Cash Accounts receivable Inventory Plant and equipment, net Investment in Buisson, S.A. Land (undeveloped) Total assets Liabilities and Stockholders' Equity Accounts payable Long-term debt Stockholders' equity $381,000 1,020,000 1,085,000 $ 2,486,000 $ 347,000 1,020,000 1,189,000 $ 2,556,000 Total liabilities and stockholders' equity Joel de Paris, Incorporated Income Statement $ 4,255,000 3,489,100 765,900 Sales Operating expenses Net operating income Interest and taxes: $ 116,000 199,000 Interest expense Тах еxpense 315,000 $ 450,900 Net income The company paid dividends of $346,900 last year. The "Investment in Buisson, S.A.," on the balance sheet represents an investment in the stock of another company. The company's minimum required rate of return of 15%.arrow_forward
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