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Return on assets

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Lily Cosmetics has annual sales of $500,000,000

maintains a net after tax profit margin of 5%
and has a sales-to-assets ratio of 4

a. What is its return on assets?

b. If its debt/equity ratio is 0.5 what is the return on equity?

Week 3 - Problem 2

On average, Microlimp's accounts receivables total $40,000,000 on sales of $400 million

What is Microlimp's average collection period?

Week 3 - Problem 3

How would the following actions affect a firm's current ratio?

a. Inventory is purchased and paid for with cash, it is not purchased on account.

b. The firm takes out a short term bank loan to pay its overdue accounts payable.

c. A customer prepays in full for specially ordered merchandise that it will take 60 days to manufacture.

d. Inventory is sold at the firm's normal 35% markup over cost.

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Solution Summary

This discusses the computation of return on assets and other rations

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Lily Cosmetics has annual sales of $500,000,000

maintains a net after tax profit margin of 5%
and ...

Purchase this Solution


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