Question

P&M Inc. 2012 Income Statement Net Sales 36,408 Cost of Goods Sold 28,225 Depreciation 1,760 EBIT...

P&M Inc.
2012 Income Statement
Net Sales 36,408
Cost of Goods Sold 28,225
Depreciation 1,760
EBIT 6,423
Interest Expense 510
EBT 5,913
Taxes 2,070
Net Income 3,843
P&M Inc.
2012 Balance Sheet
Cash 1,003 Account Payable 3,668
Account Receivable 4,218 Accrued 4,716
Inventory 21,908 Current Liability 8,384
Current Assets 27,129 Long-term Debt 11,500
Net Fixed Assets 14,080 Common Stock 17,500
Retained Earnings 3,825
Total Assets 41,209 Total Liabilities and Equity 41,209

How many dollars of sales are being generated from every dollar of net fixed assets? (Use 2012 values.)

$0.88

$1.87

$2.33

$2.59

$3.09

0 0
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Answer #1

Dollar of sales generated from every dollar of net fixed assets=Sales/net fixed assets

=(36408/14080)

which is equal to

=2.59(Approx).

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