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# Common-size percentage for net income

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Foreign Travel Services has net income of \$48,400, total assets of \$219,000, total equity of \$154,800, and total sales of \$311,700. What is the common-size percentage for the net income?
A. 9.00 percent
B. 13.90 percent
C. 15.53 percent
D. 22.10 percent
E. 31.27 percent

Delmont Movers has a profit margin of 6.2 percent and net income of \$48,900. What is the common-size percentage for the cost of goods sold if that expense amounted to \$379,000 for the year?
A. 12.90 percent
B. 23.50 percent
C. 33.25 percent
D. 41.06 percent
E. 48.05 percent

Peter's Motor Works has total assets of \$689,400, long-term debt of \$299,500, total equity of \$275,000, net fixed assets of \$497,800, and sales of \$721,500. The profit margin is 4.6 percent. What is the current ratio?
A. 0.60
B. 0.91
C. 1.01
D. 1.67
E. 2.16

Eastern Hardwood Sales has total equity of \$89,000, a profit margin of 4.8 percent, an equity multiplier of 1.5, and a total asset turnover of 1.3. What is the amount of the firm's sales?
A. \$168,200
B. \$173,550
C. \$181,430
D. \$185,620
E. \$187,500

A firm has adopted a policy whereby it will not seek any additional external financing. Given this, what is the maximum growth rate for the firm if it has net income of \$12,100, total equity of \$94,000, total assets of \$156,000, and a 40 percent dividend payout ratio?
A. 4.88 percent
B. 5.11 percent
C. 6.62 percent
D. 7.67 percent
E. 8.37 percent

#### Solution Preview

1. Foreign Travel Services

Common Size % for Net Income uses Sales or Revenue as base.

Common Size % for NI = 48,400/311,700 = 15.53% (Option C).

2. Delmont Movers

Common Size % for COGS uses Sales or Revenue as base.

Total Sales = Net Income /Profit Margin = 48,900/6.20% = ...

#### Solution Summary

The solution discusses a common size percentage for net income.

\$2.19