Question

3. A retailer purchases an item for $100 and sells it at a price of $175. What is the margin? What is the retail margin as a percentage of cost and what is retail margin as a percentage of the selling price? 4. Complete the financial document, A local company reports the following financial information: Nine Months Ended September 30 Change % 2019 700,500 120,000 2018 500,400 95,000 Total product sales Cost of goods sold Gross Margin $ Gross Margin % 5. What is the most appropriate financial performance measurement for retailers? What is the formula for solving for ROA? 6. Using the following information taken from the 2018 balance and income statement for Urban Outfitters, develop a profit margin management path and asset tumover management path (Figures are in millions) Net sales Cost of goods sold Operating expenses Inventory Accounts receivable Other current assets Fixed assets $2.734.8 $1,316.2 $575.8 $250.1 $36.7 $68,9 $690.0

Answer 1

Q3)
Purchase price	$                                 100.00
Selling price	$                                 175.00
Margin = Sales price - Purchase price	175 - 100 = 75
Retail margin as % of cost	75/100 = 75.00%
Retail margin as % of sales price	75/175 = 42.86%
Q4)
	2019	2018
Total product sales	700500	500400
Cost of goods sold	120000	95000
Gross margin $	700500-120000 = 580500	500400-95000 = 405400
Gross margin %	580500/700500 = 82.87%	405400/500400 = 81.02%
Q5)
ROA = Net income / Total assets
Q6)
Net sales	$                             2,734.80
Less : Cost of goods sold	1316.20
Gross profit	1418.60
Less : Operating expense	575.80
Operating profit	842.80
Gross profit margin	1418.6/2734.8 = 51.87%
Operating profit margin	842.8/2734.8 = 30.82%
Inventory turnover ratio = Cost of goods sold / Inventory
Inventory turnover ratio = 1316.20 / 250.1
Inventory turnover ratio = 5.26
Receivable turnover ratio = Sales / Receivable
Receivable turnover ratio = 2734.80/36.7
Receivable turnover ratio = 74.52
Fixed asset turnover ratio = Sales / Fixed assets
Fixed asset turnover ratio = 2734.80 / 690.0
Fixed asset turnover ratio = 3.96