Question

Achieve's Companies, a home improvement store chain, reported the following summarized figures:

Achieve's Companies, a home improvement store chain, reported the following summarized figures: 囲 (Click the icon to view the income statement.) 囲(Click the icon to view the balance sheets.) Achieve's has 20,000 common shares outstanding during 2018. Read the requirements Requirement 1. Compute the profit margin ratio for Achieve's Companies for 2018 Begin by selecting the formula to calculate Achieve's Companies' profit margin ratio. Then enter the amounts and calculate the profit margin ratio for 2018 (Round your answer to one tenth of a percent, XX%) - Profit margin ratio

Answer 1

(1)-Profit Margin Ratio for 2018

Profit Margin Ratio for 2018 = [Net Income / Net Sales Revenue] x 100

= [$23,800 / $51,200] x 100

= 46.5%

(2)-Rate of Return on total assets for 2018

Rate of Return on total assets for 2018 = [Net Income / Average Total Assets] x 100

= [$23,800 / {($86,700 + $57,700)/2}] x 100

= [$23,800 / $72,200] x 100

= 33.0%

(3)-Asset Turnover Ratio for 2018

Asset Turnover Ratio for 2018 = Net Sales Revenue / Average Total Assets

= $51,200 / $72,200

= 0.71 Times

(4)-Rate of return for Common Stockholders Equity for 2018

Rate of return for Common Stockholders Equity for 2018 = [Net Income / Average Equity] x 100

= [$23,800 / {($45,200 + $32,900)/2}] x 100

= [$23,800 / $39,050] x 100

= 60.9%