Return on Sales Ratio Using the data below, compute Ian’s return on sales ratio for the...
Return on Sales Ratio
Using the data below, compute Ian’s return on sales ratio for the
month of January.
| Net Sales | $12,000 |
| Cost of goods sold | 3,000 |
| Operating expenses | 7,000 |
| Other income | 500 |
| Income tax expense | 1,000 |
Round answer to the nearest whole percentage.
Homework Answers
Operating profit
= (Net sales + Other income) - COGS - Income tax expense - Operating expenses
= (12,000+500) - 3,000 - 7,000 - 1,000
= 1,500
Return on sales = Operating profit/Net sales = 1500/12000
= 12.5%
= 13% (rounded)
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Return on Sales Ratio
Using the data below, compute Ian’s return on sales ratio for the...
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2. The president believes that a $6,400 increase in the
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