Question

Use the following table, which provides historical data for SnacksCo, a manufacturer of snack foods, to answer the next four questions. Assume an operating tax rate of 30 percent and a cost of capital of 9 percent Income statement Year 1 Year 2 540.0 555.0 Revenues Cost of sales (350.0) (360.5) Selling, general, and (50.5) (S0.0) administrative (10.0) (10.5) Depreciation 130.0 EBIT 133.5 Interest expense (7.5) (7.5) Gain/(loss) on sale of assets (30.0) Earnings before taxes 122.5 96.0 Тахes (24.8) (21.5) Net income 97.7 74.5 Balance sheet Year 2 Year 1 Operating cash Excess cash and marketable 10.6 15.0 securities 102.8 100.0 Accounts receivable 90.0 94.5 150.0 157.5 Inventory Current assets 353.4 367.0 206.7 219.8 Property, plant, and equipment Equity investments 180.0 180.0 740.1 766.8 Total assets 116.6 119.6 Accounts payable

Answer 1

Answer for

Q.6 C. 24.0 Percent

Operating Profit Margin is a profitability ratio that is used to calculate the percentage of profit of an entity. This is calculated based on entity's operations before interest and Income Taxes.Operating margin calculated by deducting Cost of Goods Sold, selling and admin expenses, depreciation from total sales.

The calculation is

Operating Profit Margin = (Operating Profit / Total Sales) *100

Here,

Operating profit = 133.5 [ EBIT (as COGS, Selling and Admin Exp and Depreciation Inculded)]

Total Sales = 555   

= (EBIT / Total Sales ) *100

= (133.5/555)*100

Operating Profit = 24.05 or 24.00