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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

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    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.