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Accounting (Business, Managerial)

ACCOUNTING [Business, Managerial]

A firm's net profit margin is 3%, its financial leverage ratio is 2, and its asset turnover ratio is 4. The firm's return on assets is.

a. 6%
b. 8%
c. 12%
d. 24%

A firm's net profit margin is 3%, its financial leverage ratio is 2, and its asset turnover ratio is 4. The firm's return on equity is

a. 6 %.
b. 8%.
c. 12%.
d. 24%.

A firm's net income is $100,800 on net sales of $2,520,000. Assets for the period were $840,000. For the year

a. net profit margin was 4.0%, turnover was 0.33, and ROA was 12.0%.
b. net profit margin was 12.0%, turnover was 25.00, and ROA was 4.0%.
c. net profit margin was 4.0%, turnover was 3.00, and ROA was 12.0%.
d. net profit margin was 12.0%, turnover was 3.00, and ROA was 4.0%.

At the end of the year, Bingo Boards Inc. had current assets of $25,000, total assets of $100,000, owners' equity of $30,000, and long-term debt of $50,000. What is its current ratio?

a. 0.50
b. 0.70
c. 1.25
d. 2.00

At the end of the year, Pilot Lighting Inc. had total assets of $160,000, owners' equity of $100,000, earnings of $20,000, and total net sales of $400,000. What is its net profit margin ratio?

a. 5.0%
b. 12.5%
c. 25.0%
d. 33.3%

At the end of the year, Pilot Lighting Inc. had total assets of $160,000, owners' equity of $100,000, earnings of $20,000, and total net sales of $400,000. What is its return on investment?

a. 5.0%
b. 12.5%
c. 25.0%
d. 33.3%

A firm's net income for the year was $100,000. Assets totaled $750,000, and liabilities totaled $150,000. Return on equity was

a. 11.1%.
b. 13.3%.
c. 16.7%.
d. 66.7%.

Solution Preview

Dear Student
These are your answers supported by logic of calculations.

A firm's net profit margin is 3%, its financial leverage ratio is 2, and its asset turnover ratio is 4. The firm's return on assets is.
=Net Profit Margin x Asset Turnover
=3*4
= 12% i.e. C

A firm's net profit margin is 3%, its financial leverage ratio is 2, and its asset turnover ratio is 4. The firm's return on equity is
=profit margin times total asset turnover times financial leverage, ...

Solution Summary

ACCOUNTING [Business, Managerial]

A firm's net profit margin is 3%, its financial leverage ratio is 2, and its asset turnover ratio is 4. The firm's return on assets is.

a. 6%
b. 8%
c. 12%
d. 24%

A firm's net profit margin is 3%, its financial leverage ratio is 2, and its asset turnover ratio is 4. The firm's return on equity is

a. 6 %.
b. 8%.
c. 12%.
d. 24%.

A firm's net income is $100,800 on net sales of $2,520,000. Assets for the period were $840,000. For the year

a. net profit margin was 4.0%, turnover was 0.33, and ROA was 12.0%.
b. net profit margin was 12.0%, turnover was 25.00, and ROA was 4.0%.
c. net profit margin was 4.0%, turnover was 3.00, and ROA was 12.0%.
d. net profit margin was 12.0%, turnover was 3.00, and ROA was 4.0%.

At the end of the year, Bingo Boards Inc. had current assets of $25,000, total assets of $100,000, owners' equity of $30,000, and long-term debt of $50,000. What is its current ratio?

a. 0.50
b. 0.70
c. 1.25
d. 2.00

At the end of the year, Pilot Lighting Inc. had total assets of $160,000, owners' equity of $100,000, earnings of $20,000, and total net sales of $400,000. What is its net profit margin ratio?

a. 5.0%
b. 12.5%
c. 25.0%
d. 33.3%

At the end of the year, Pilot Lighting Inc. had total assets of $160,000, owners' equity of $100,000, earnings of $20,000, and total net sales of $400,000. What is its return on investment?

a. 5.0%
b. 12.5%
c. 25.0%
d. 33.3%

A firm's net income for the year was $100,000. Assets totaled $750,000, and liabilities totaled $150,000. Return on equity was

a. 11.1%.
b. 13.3%.
c. 16.7%.
d. 66.7%.

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